New AMD Roadmap for 2013 (donanimhaber.com)

[krumme]

Originally Posted by mrmt

I'm not sure if I'd call CPU market a red ocean yet. The bottom market certainly is, nobody wants to develop a custom chip for a blu-ray player, but in cars, phones, tablets, convertibles, there is still a lot of space for differentiation. If you look at the biggest ARM players, Apple, Samsung, Qualcomm, Nvidia, every one of them is trying to grow by differentiation, not by making their operation more efficient as they would have to do in a true red ocean environment.

I see a weakness on the ARM business model. ARM chain is composed from an IP researcher, then a lot of people customizing designs with overlapping efforts and then a few foundries, some of them spending money on the same node but not sharing research... and everyone here wants higher margins.

There might be a lot of inefficiencies looking at the chain, and when facing other chains like MIPS the bigger player wins, but Intel is a different game. Intel as a vertical player can be very focused and deliver a fine tuned solution for a certain niche, and there isn't such thing as fight for margins internally, the final result is what counts.

But even if Intel can't get enough margins to keep its current business model, they can adapt. Intel overcame the 180nm debacle, then overcame netburst, then moved to tick/tock, then went for power efficiency.... every one of these events generated a different Intel. If business change again, they have both the cash and the technology to adapt.

I agree on most. Especially on the weakness on the ARM business model. I am pretty sure Intel will show with the new Atoms what difference it means to have both top end design and topend process in house, giving each other feedback. But i simply can not see the profit in it as the market have developed. Where is the profit?

I agree Intel have shown impressive ability to be agile. But fighting Samsung is different to say the least. Again its reflected in share price.

But hopefully they will impress again, and the new and bigger competition will bring them to another level.

(edit: yes its the low end that is red ocean, but we have to remember the best can earn good money here too )

[ShintaiDK]

Originally Posted by krumme

I agree on most. Especially on the weakness on the ARM business model. I am pretty sure Intel will show with the new Atoms what difference it means to have both top end design and topend process in house, giving each other feedback. But i simply can not see the profit in it as the market have developed. Where is the profit?

I agree Intel have shown impressive ability to be agile. But fighting Samsung is different to say the least. Again its reflected in share price.

But hopefully they will impress again, and the new and bigger competition will bring them to another level.

(edit: yes its the low end that is red ocean, but we have to remember the best can earn good money here too )

There is huge profit in ARM and other parts for that matter. TSMC runs with 40%+ margins. Same with Qualcomm.

[mrmt]

Originally Posted by krumme

I agree on most. Especially on the weakness on the ARM business model. I am pretty sure Intel will show with the new Atoms what difference it means to have both top end design and topend process in house, giving each other feedback. But i simply can not see the profit in it as the market have developed. Where is the profit?)

I see your point here. Atom CPU or Atom SoC as it is today are not be enough for huge margins Intel currently operates, but the company is focusing in bringing more platform parts into the SoC. For example, they are switching radio components from analog to digital and integrating them into the SoC. This will give them a HUGE advantage on die size area, power consumption and complexity of the PCB over every single ARM vendor out there.

Will this be enough to sustain their margins? I did not run the numbers, but the number of times this idea is floating on Intel events can give us an idea of their expectations.

[pablo87]

Originally Posted by MisterMac

Interesting viewpoint - but don't you think Intel has:

A. Plans to lower cost per wafer, per working CHIP etc etc - to loose some Gross margins but also lower costs to make the drop less noticeable.

b. If IT wants just a flat device to access corporate data - corporate needs big boxes to store data and handle all those simoultaneous compute requests in both networking and direct resources.

Which benefits intels cash cow in servers - which then in turn could make more use of MIC outside HPC for coprocessing of certain user workloads.


I can't believe Intel doesn't have several plans in order - with only a few required to succeed in order to continue to gain or stand neutral at ground in terms of revenue\profit\margins.


You tell me how many users can work on a E5 - and the cost of it versus X hp\dell boxes for the enterprise.
Intel would sell more expensive chips at a greater margin than they're business enterprise crappy pentium box workstations.

Result: Enterprise saves money - intel gains more revenue.
It's just moved from low end celeron\pentium to expensive xeon.

Something i'm quite sure intel would like.

A - it seems they don't - they seem obsessed with improving integrated graphics performance (is that a contradiction to call graphics good enough and yet pour billions into it?) to compete with AMD which used to be built on fully depreciated fabs (intentionally I believe) and now accounts for 25-40% of latest generation CPU die size. A waste really. Meanwhile tablet, Chromebook and discrete graphics are doing very well (based on NV's Q3 earnings released today, discrete grew this quarter while PC shipments fell) - unless users are disabling their newly acquired discrete cards and using Sandy's or Ivy's instead?

B - agree, and Intel is so good at this - the planet could not have a better vendor, seriously (no sarcasm).

C - thank goodness for Intel, AMD is so inept - everyday is a bad day over there. Today's bad news:

- AMD adds another abu dhabi type to the BoD
- Cray adds Intel (what took them so long? )
- while AMD's discrete business shrank, NVIDIA's grew;
- more damning glassdoor employee (ex mostly) reviews.

D - no such luck with ARM, its partners, Apple, and Google.

[Khato]

Originally Posted by mrmt

Will this be enough to sustain their margins? I did not run the numbers, but the number of times this idea is floating on Intel events can give us an idea of their expectations.

Unfortunately it may be a question to which we'll never get a straight answer. I'm guessing that it'll impact the 60%+ margins that Intel has enjoyed of late, but not by a whole lot. I certainly did find the most recent Anandtech podcast interesting as Anand mentions near the beginning (in the 2:30-3:00 range) that Intel's pricing for Clovertrail is in the $20 range or slightly below.

[Ajay]

Originally Posted by ShintaiDK

There is huge profit in ARM and other parts for that matter. TSMC runs with 40%+ margins. Same with Qualcomm.

The Intel BOD won't be happy with those kind of margins. They must be planning to crush the 'high end' ARM competition (tablets, best smart phones) with their process node advantage, so that they can eventually charge more.

[mrmt]

Originally Posted by Ajay

The Intel BOD won't be happy with those kind of margins. They must be planning to crush the 'high end' ARM competition (tablets, best smart phones) with their process node advantage, so that they can eventually charge more.

I'm sure the BoD would be even happier with bigger gross margins, but they don't have strategy to make them bigger, so they have to live with that they have.

Very high gross margins is a business strategy, given the right volumes Intel could live with smaller gross margins but have the same or even higher levels of profitability.

[Ajay]

Originally Posted by mrmt

I'm sure the BoD would be even happier with bigger gross margins, but they don't have strategy to make them bigger, so they have to live with that they have.

Very high gross margins is a business strategy, given the right volumes Intel could live with smaller gross margins but have the same or even higher levels of profitability.

Good points. Still, ASPs are going to decline substantially (relative to x86), it's going to take allot more volume to produce good profits.