AMD: Moore's Law's end is near

[frozentundra123456]

So you don't think the lost sales would impact mobo, display, psu, dram/nand makers enough(not to mention loads of Online/brick & mortar stores et al) to warrant a bailout from the govt ? Don't get me wrong here but I can see why the lobbying system in so fucked up in the US !

I didnt say it would have no effect. I think it would be a much smaller effect than a failure of one of the big automakers would have. My main point was that the automakers and their unions, and also the banks in the recent collapse have a huge amount of political clout. I am not saying I like it or it is right, but unfortunately that is the way it is.

As far as the impact on PC parts suppliers, I am not sure it would have that big of an effect. There is plenty of room for intel to pick up any lost sales from an AMD failure. The only way I see a big drop in PC sales if AMD went under is if Intel hiked prices to unreasonable levels, and that would be counterproductive to them as well.

Personally though, I think AMD will survive at least.

 

[guskline]

IDC: I couldn't agree with you more. I have followed AMD so long and used their chips since the 386DX40 era.

You can blame Intel "until the cows come home"; however, AMD needs to look in the mirror and accept blame for all of the missed steps along the way.

Intel isn't crying "woe is me" ARMS are killing us. They keep their nose to the grindstone.

 

[R0H1T]

What "lost sales"? The sales volume is fixed, all you are doing is shuffling around who those sales go to.

In the absence of AMD those sales would go to Intel or Asus or MS or any number of other existing players in the hardware market.

It wasn't the end of the world Qimonda went bankrupt, or Spansion, or Elpida, or Hynix...etc. If AMD goes bankrupt it will be devastating in a personal way to those who's personal income is tied to AMD, but the rest of the industry and world would barely notice outside of reading about it in a headline or two.

edit: mrmt beat me to it

Then again those firms didn't span across different sectors of the semiconductor industry like AMD, there is also this little thing which differentiates them from that list is that AMD, even though being a relatively small player as compared to Intel, is indirectly responsible for sales of components starting from capacitors to higher end displays ! Think it as how the bankruptcy of an LG will impact the rest of the industry & not just mobile but others as well.

 

[R0H1T]

Personally though, I think AMD will survive at least.

That's what everyone wants but my only point of contention is that how most here see it as "no one will even notice" if & when AMD goes bankrupt !

 

[mrmt]

Then again those firms didn't span across different sectors of the semiconductor industry like AMD, there is also this little thing which differentiates them from that list is that AMD, even though being a relatively small player as compared to Intel, is indirectly responsible for sales of components starting from capacitors to higher end displays ! Think it as how the bankruptcy of an LG will impact the rest of the industry & not just mobile but others as well.

Why wouldn't Intel be able to supply everyone in the x86 market if AMD went under? Why wouldn't mobo makers that make AM3 boards switch to LGA1150 boards? You are seeing a supply issue where there is none. Sure, Saphire would suffer, but who cares?

 

[MisterMac]

Then again those firms didn't span across different sectors of the semiconductor industry like AMD, there is also this little thing which differentiates them from that list is that AMD, even though being a relatively small player as compared to Intel, is indirectly responsible for sales of components starting from capacitors to higher end displays ! Think it as how the bankruptcy of an LG will impact the rest of the industry & not just mobile but others as well.

Your completely ignoring everyones arguments.

Some small players of supply to AMD's product BOM sure - but hardly something to write home about.

Even they will have noticed the drop in volume in certain production areas and not bet all their horses on AMD.
(Unless they're as mad as AMD's BoD).


LG is also the stupidest comparison - as LG is to certain industries what Intel is to CPU\x86.

your comparing AMD to the Intel of electronics-manufacturing - and if the intel of electronics manufacturing went under - then yes shit would happen.

So would it - if Intel went under.


AMD Revenue: 2011 $6.57B
LG Revenue: 2011 $134B


...see the difference?

 

[R0H1T]

Why wouldn't Intel be able to supply everyone in the x86 market if AMD went under? Why wouldn't mobo makers that make AM3 boards switch to LGA1150 boards? You are seeing a supply issue where there is none. Sure, Saphire would suffer, but who cares?

What you are assuming is that Intel will pickup the majority of that lower end which AMD serves but last I checked Intel's offerings(CPU+mobo) are still more expensive than AMD. My personal take is that unless Intel lowers its margins/prices, assuming AMD goes under, the lower end of the desktop/laptop market will shift to mobiles/tablets instead except of course the enterprise customers & people who actually need x86 at home !

 

[R0H1T]

LG is also the stupidest comparison - as LG is to certain industries what Intel is to CPU\x86.

your comparing AMD to the Intel of electronics-manufacturing - and if the intel of electronics manufacturing went under - then yes shit would happen.

So would it - if Intel went under.


AMD Revenue: 2011 $6.57B
LG Revenue: 2011 $134B


...see the difference?

Lets just say ~ LG is to Samsung what AMD is to Intel, on a much smaller scale, so remind me why is this such a bad example ?

edit: You also seem to have conveniently ignored that a large part of their revenue stream is domestic & just like Samsung spread across different industries & other verticals, hence their electronics division(more global) would be more apt in this case !

 

[ShadowVVL]

well can amd survive as a gpu company wile making small apus like kabini on the side?

 

[Sleepingforest]

The lower end of laptops and desktops is already shifting to tablets. Plus, the lowest cost CPU I see on Newegg/Amazon is a Sempron at $36. The cheapest Celeron is $40. That's not a huge difference, especially after a volume discount.

 

[mrmt]

What you are assuming is that Intel will pickup the majority of that lower end which AMD serves but last I checked Intel's offerings(CPU+mobo) are still more expensive than AMD.

What do you mean by more expensive? Sometimes you can't even buy a pizza with the price difference, and even if this difference were that relevant, AMD pricing structure isn't sustainable in a two years horizon. Let me bring a post I wrote yesterday replying on why AMD took the decision of pay GLF to not deliver chips in Q412:

http://forums.anandtech.com/showpost.php?p=34836835&postcount=172

(...)

AMD simply went to the bottom of the value ladder, they can't go any lower because if they do, even if they reach their targeted volumes they won't be able to generate any cash at all. In fact, they might even lose cash regardless of what they sell. So it is worth to eat a one-quarter fee in order to keep pricing intact for the next quarters than crater prices now and never see them recover again.

It's not so simple a being able to sell or not, it's much worse than that. It's about being a viable company or not. By paying the take-or-pay charge, AMD said that it cannot go lower than 38% gross margin.

That low end that AMD is serving now will have to be ceded to Intel and ARM or served by an economically better AMD processor, because the current price/cost structure isn't sustainable, it is killing AMD.

So your question regarding AMD serving the bottom market is a non-issue, because not even AMD is interested in serving the bottom market the way they are serving now. They *will* go bankrupt if they do.

 

[Sleepingforest]

Lets just say ~ LG is to Samsung what AMD is to Intel, on a much smaller scale, so remind me why is this such a bad example ?

edit: You also seem to have conveniently ignored that a large part of their revenue stream is domestic & just like Samsung spread across different industries & other verticals !

Yeah, this is totally untrue. Samsung does mainly smartphones and monitors.
LG does mainly household appliances and panels. LG actually is a supplier to Samsung and many other companies.

AMD does not supply Intel anything, and they in fact produce the same product. Their GPU business is much smaller, and they don't make enough money from other products to survive without the CPUs.

 

[R0H1T]

What do you mean by more expensive? Sometimes you can't even buy a pizza with the price difference, and even if this difference were that relevant, AMD pricing structure isn't sustainable in a two years horizon. Let me bring a post I wrote yesterday replying on why AMD took the decision of pay GLF to not deliver chips in Q412:

http://forums.anandtech.com/showpost.php?p=34836835&postcount=172

What I'm saying is that people choose AMD for two reasons mainly ~ cheap cost & future upgrade path on the same socket. Now with Intel they may choose to skip desktops altogether because overall it'll be a more expensive proposition over a period of say ~5yrs !

That low end that AMD is serving now will have to be ceded to Intel and ARM or served by an economically better AMD processor, because the current price/cost structure isn't sustainable, it is killing AMD.

So your question regarding AMD serving the bottom market is a non-issue, because not even AMD is interested in serving the bottom market the way they are serving now. They *will* go bankrupt if they do.

The point is ~ with AMD gone the lower end of the x86 market will pretty much cease to exist & the overall x86 market will continue to lose to ARM across different sectors & not just the mobile/tablet market.

 

[krumme]

This.

t's worth exploring what scenarios the Moore's Law wouldn't be applicable. When investing the kind of money Intel does, bringing new things to the process like finfet, then it might be worth it. Intel 22nm finfet brought nice efficiency gains and economic gains from reduced die size, I think they did a nice die shrink. OTOH AMD is tied to a subpar foundry that has practically canned their 20nm process because the implementation seemed too botched that could not attract a single customer.

With MPUs reaching maturity, it doesn't make sense to have volumes like AMD, or small foundry divisions inside a company. The benefits are still there, but the economic bar (CAPEX/Volumes) is too high for most people to afford, and this includes AMD.

AMD is too small compared to the big ARM manufacturers, or even with Nvidia, and they gave up their fabs, so they aren't an interesting customer for top tier foundries (TSMC) and can't afford to finance themselves. So the Moore's law indeed will slow down for AMD, not because of physics, but because of economy of scale. The botched GLF implementations will just make things worse.

Thank you for the argument, that just happens to show, also how fucked up Intels current business model is on the long run.

You just cant pull an ultrabook any more.

 

[R0H1T]

Yeah, this is totally untrue. Samsung does mainly smartphones and monitors.
LG does mainly household appliances and panels. LG actually is a supplier to Samsung and many other companies.

AMD does not supply Intel anything, and they in fact produce the same product. Their GPU business is much smaller, and they don't make enough money from other products to survive without the CPUs.

LG doesn't supply Samsung atleast not anything that I know of ! See this ~ LG & Samsung overlap across industries & if anything Samsung supplies LG a whole lot more.

Also LG has had a head start in alot of emerging markets like India but Samsung has been clearly superior of the two especially in the last decade or so ! This is why LG has such a large chunk of the consumer electronics market but Samsung will continue to expand at a greater rate than LG in the foreseeable future.

 

[mrmt]

Thank you for the argument, that just happens to show, also how fucked up Intels current business model is on the long run.

Yes, if they can't get the right volume, they are toast. That's why they are so keen on mobile. The volumes they need are there.

 

[mrmt]

The point is ~ with AMD gone the lower end of the x86 market will be pretty much cease to exist & the overall x86 market will continue to lose to ARM across different sectors & not just the mobile/tablet market.

That might happen, but did you think that Intel can serve this kind of market with a cheaper processor, or by lowering their margins a bit? There is nothing pointing out for the kind of scenario you are describing. If AMD goes under, we won't lose a bleeding edge company with a lot of fab capacity, but a lagging edge company without much relevance at all on the big picture.

 

[MisterMac]

LG doesn't supply Samsung atleast not anything that I know of ! See this ~ LG & Samsung overlap across industries & if anything Samsung supplies LG a whole lot more.

...but LG & Samsung are also of equal size ish.


AMD to Intel not even close.


Its not a valid comparison.
Let me put some reality check into you.

How LARGE of AMDs shipments do you think are because of future upgradepaths?

If anything it's because of a better value proposition NOW.
Which is what 99% of all buyers choose from - we choose the best proposition now.
The "well there's gonna be a upgrade later!" is only a sweetener - but far from being the major factor in buying.

Dumb joe does not give a roots ass if his dell or hp has upgradeable part - he'd rather just buy a new box.


The ammount of geeks that buy processors based on upgradepath is scaringly slow - and even most of us have converted to saying we don't mind buying a new mobo for a decent extra performance.

Same thing goes for the market AMD serves - AMD offers better gaming performance on APU's with really low budgets.

But if someone buys this - it's because they have a need.
If the only other choice is intel + dGPU for 20 bucks more you think theyll say no - or just skip 2 pizza nights and pay for it?


Seriously.

 

[ShintaiDK]

The overall x86 market would shrink dramatically & I can't see how that helps anyone bar Intel & Via to a lesser extent ! Then there is the GPU market that'll be hit hard as well, I really don't see how you can accept monopolistic firms that'll virtually own 60~70 billion $ market with their only real competitor going bankrupt ? This certainly can't be good for the consumers !

Intel had no competition since Core 2. And you dont seem to understand how the business works. The market wouldnt shrink. And USA might actually even gain jobs if AMD went bankrupt. And its not a problem with a monopoly in the segment that Intel is in. Too high prices or lack of innovation, and people simply dont buy. If anything, AMD gone might actually mean lower prices.

 

[ShintaiDK]

What I'm saying is that people choose AMD for two reasons mainly ~ cheap cost & future upgrade path on the same socket. Now with Intel they may choose to skip desktops altogether because overall it'll be a more expensive proposition over a period of say ~5yrs !

The upgrade path is the same as Intel. How many Llano users upgraded to Trinity? Oh wait..different sockets. But again, how many people does this? <1%. And often is socket compability a bigger problem than benefit.

AMD is not really cheap either.

 

[lagokc]

Why wouldn't mobo makers that make AM3 boards switch to LGA1150 boards?

Is there even actually a single mobo maker that makes AM3 boards but not Intel boards?

 

[R0H1T]

...but LG & Samsung are also of equal size ish.

Well 2.5~3 times isn't equalish, this is what the situation is in 2013.

AMD to Intel not even close.


Its not a valid comparison.
Let me put some reality check into you.

How LARGE of AMDs shipments do you think are because of future upgradepaths?

If anything it's because of a better value proposition NOW.
Which is what 99% of all buyers choose from - we choose the best proposition now.
The "well there's gonna be a upgrade later!" is only a sweetener - but far from being the major factor in buying.

Dumb joe does not give a roots ass if his dell or hp has upgradeable part - he'd rather just buy a new box.


The ammount of geeks that buy processors based on upgradepath is scaringly slow - and even most of us have converted to saying we don't mind buying a new mobo for a decent extra performance.

Same thing goes for the market AMD serves - AMD offers better gaming performance on APU's with really low budgets.

But if someone buys this - it's because they have a need.
If the only other choice is intel + dGPU for 20 bucks more you think theyll say no - or just skip 2 pizza nights and pay for it?


Seriously.

Lets just take that inane comparison out of the equation, now say the x86+dGPU market is 60 billion $ with Intel having 50 billion $ in sales, AMD 6 billion $ & Nvidia+Via having the rest of it.

What I'm saying is ~ if AMD is immediately taken out of the equation the total market left will be worth 54 billion $ but from what I gather the rest of you are saying that Intel + Nvidia + Via will make up for this shortfall over a period of time right ? I however do not think that the overall market will expand in value terms & if & only if Nvidia + Intel lower their prices drastically, atleast for the lower end, will we see the market expand beyond 54 billion $ let alone the 60 billion $ mark !

If this isn't what is being said here then I'd like to know what is ?

 

[Charles Kozierok]

What I'm saying is ~ if AMD is immediately taken out of the equation the total market left will be worth 54 billion $ but from what I gather the rest of you are saying that Intel + Nvidia + Via will make up for this shortfall over a period of time right ?

Suppose there are two gas stations in a town, and each sells 10,000 gallons of gasoline a month. If one of them closes down, will the other still sell only 10,000 gallons?

 

[Sleepingforest]

Well 2.5~3 times isn't equalish, this is what the situation is in 2013.

Right, but their industries don't really overlap (and in fact, LG is a panel manufacturer for Samsung monitors) and Intel is 10 times bigger than AMD in revenue.

And what we are saying is yes, Intel is 100% capable of picking up the low end and slack if AMD fails. Intel's current generation low price chips are only around 10-15% more expensive than AMD's.

 

[Idontcare]

What I'm saying is ~ if AMD is immediately taken out of the equation the total market left will be worth 54 billion $ but from what I gather the rest of you are saying that Intel + Nvidia + Via will make up for this shortfall over a period of time right ?

That is how it works, in every industry.