I think the unending warfare between Intel and AMD will now be fought more on the design front than on the price front. For years the two companies have been chasing each other out in price catch-me-if-you-can game. But now they seem to have realized the long-term detrimental effect of a continued price war. The last year saw AMD’s share fall more than 30% when share markets globally rose to unprecedented heights. Intel’s share rose merely by 27%. In 2006, Intel’s annual profit declined 42 percent in spite of impressive semiconductor growth of 10 percent, while AMD lost $166 million even though it could successfully dent Intel’s PC as well as server markets shared almost 100 percent between the two companies. Intel is under pressure from investors for higher profit margins; while AMD, to make both ends meet.
MULTI-CORE PUSH
The present multi-core war between Intel and AMD started on the price front but is now clearly moving to the design front. In August last AMD designers pushed the clock speed of its dual-core Opterons up to 3.2GHz while the Company cut prices on single-core Rev E Opterons by 18 to 32 percent, and of dual-core Rev F Opterons by 17 to 30 percent. Intel responded by putting two more Xeons with upgraded designs into the field. The first was a high-end Clovertown Xeon X5365 chip, cranked up to 3GHz with a 1.3GHz front side bus. The other was a 2GHz low-voltage Clovertown.
Intel’s claim of Clovertown design being upgraded to a “quad-core” was shot down by AMD, which said that unlike its own Barcelona Opteron design, the Clovertown was not designed to be a “real” quad-core, and it was in reality merely two dual-core chips put side-by-side in a single chip package and sharing a single CPU socket.
While AMD has a point, I think Intel’s strategy was to design a quad-core equivalent months before AMD could introduce the “real” quad-core design products in September 2007. The upgraded Clovertown might lack the technical capabilities of the upgraded Barcelona, designed to have four cores on a single chip die, but the Clovertown design could meet an existing need. Server customers want increasing performance in the same thermal envelope irrespective of how the product is designed. While the upgraded X5365 Xeon processor was not exactly cool in the sense that it had a thermal design point of 120W, it could provide a notable performance rise over the prior Xeon X5355 running at 2.67GHz.
Barcelona dual-core Opteron runs at 3GHz, and the quad-core has debuted at 1.7-to-2GHz. Barcelona is getting excellent reviews and is commanding premium prices. AMD is working on advances in the design and will soon come out with new design versions. In the new versions, quad-core Barcelona will clock a maximum of 3GHz within 92W thermal envelope. Meanwhile, Intel has assured a fresh quad-core microprocessor design in early 2008. By the time this product hits the market, Clovertown will set up Intel’s quad-core base from which the new product will take off.
NODE DESIGN WAR
AMD perhaps realizes this, and aims to offset the lead already taken by Intel before quad-core Barcelona introduction. AMD claims superior design for Barcelona, and asserts that not only is this a “real” quad-core chip, but it offers power management and virtualization features not available in the Clovertown family.
Designers in both the companies are well entrenched to carry on the fight beyond multiple-core designs into leading-edge node designs. While Intel claims it is ahead of AMD in the design of Penryn family of 45nm chips, AMD says it is well on its way to ship its 45nm chip in 2008.
Research analysts Bear Stearns and Citigroup do not envisage any price war between Intel and AMD. Indeed, Citigroup predicts that processor prices will rise in 2008 in spite of heightened Intel-AMD war. I believe this to be so because the two companies are warring on designs rather than on prices.
