Hypothetical worst case outcome with AMD

[Furphy Haruspex]

I love this forum. Though it is primarily a tech forum it clearly attracts several incredibly talented professionals in the industry. Ones with both engineering and business experience. SO this is a non-tech question that impact the CPU market directly.

I see a lot of discussion on this thread concerning the competition between AMD and INTEL and AMD and NVIDIA and likely future outcomes. While some are doom and gloom I never see any real factual discussion on what doom and gloom looks like.

So, let's discuss whether an AMD bankruptcy is even a reasonable possibility in this marketplace right now. If it were to happen what would be the impact on current agreements? What would it do to the market place in general with respect to the future products, innovation, costs, reliability, etc? Particularly with respect to firms that rely on competition and innovation in the cpu sector to control pricing and facilitate new product development (Apple, Samsung, Lenovo, etc)?

My personal opinion is that AMD is not going anywhere until at least 2017 when the first real wall of senior note debt obligation become due. To me that is the closest make or brake point with respect to continued operations.

I think it would be terrible for the CPU and GPU markets not simply because of basic market mechanics concerning price competition and innovation but because we have literally seen these effects at work since AMD stumbled in 2008 and 2012. Intel's pricing and innovation went to hell for consumers. As did NVIDIA's pricing.

 

[Phynaz]

Yeah, this isn't going to end well.

 

[frozentundra123456]

Yeah, this isn't going to end well.

Definitely.

 

[Techhog]

Yeah, this isn't going to end well.

Does any thread on these forums that isn't about asking for help end well?

 

[SlowSpyder]

Worst case? See Circuit City. But I would think someone would scoop up AMD if things started to really go down hill.

 

[VirtualLarry]

Worst case? See Circuit City. But I would think someone would scoop up AMD if things started to really go down hill.

If AMD is Circuit City, then is NVidia Bestbuy, and Intel is Amazon.com? Or maybe Walmart.

 

[bunnyfubbles]

Worst case scenario is already happening, and AMD is just about completely inconsequential to that picture; ie ARM and smart devices + cloud computing are already killing off the home computer.

As for the short term, AMD is already pretty much completely irrelevant for desktop and laptop PCs, intel will still need to keep innovating if they hope to keep selling us products that can do things our smartphones and tablets and cannot, so innovation cannot stagnate, nor can prices skyrocket, our desktop CPUs will be fine (albeit, not ideal) at least until our 'smart' devices can connect to cloud computers at gigabit speeds (that's when the poo really hits the fan)

And as one of the few things AMD is doing right, I could see AMD GPU living on even if AMD CPU goes under. That being said, if even that went away it wouldn't be too bad. The ultra high would probably suffer under nVidia monopoly, but the lower to midrange would still thrive as nVidia would still need to convince us that we'd need a dGPU over what intel could give us in iGPU, and with AMD gone, intel might even venture further into the dGPU scene, although that does feel a bit of a stretch.

 

[Deders]

Surely their presence in the console market should keep them going a bit longer.

 

[bunnyfubbles]

Surely their presence in the console market should keep them going a bit longer.

console chips only account for 4% of AMD's marketshare

 

[Idontcare]

Worst case? See Circuit City. But I would think someone would scoop up AMD if things started to really go down hill.

At least for the graphics IP if for nothing else. But I have to imagine there is plenty of IP on the CPU side of things to be of value to a company or two.

 

[MisterMac]

At least for the graphics IP if for nothing else. But I have to imagine there is plenty of IP on the CPU side of things to be of value to a company or two.

But useable for who?

Does AMD's GPU IP scale to ARM market?
atleast without significant R&D "tweaking".


I wonder (like the other guy) when we get the full cloud world with terabit\gigabit internet speeds - if custom rendering mainframes could make amd\nvidia IP worth more?

 

[easp]

Intel's advantage: Process, volume, lack of serious competition in their core markets.
Intel's liability: Their core markets are flattening or declining. They missed the GPU wave a decade and a half ago, and missed the shift to smartphones and tablets. That + their process lead means that they are having a harder and harder time selling enough transistors to amortize their fab investment.

AMD's disadvantage: They don't have Intel's volume or process lead. AMD is also late to mobile.
AMD's advantage: They don't have the liability Intel has of product portfolio / manufacturing portfolio mismatch. They don't have to worry as much about protecting their core markets as Intel does, which removes one impediment to adapting quickly.

Worse case, Apple tries to buy out AMDs IP portfolio, but faces stiff competition from well connected Chinese companies and a company in Bermuda with ties to Russian Oligarchs.

 

[BrightCandle]

If AMD just went out of business and none of the various parts of the business got sold off the market would look a little different. But you would probably find the choice would then widen to ARM + partners v Intel or some other competition because no one is going to leave such a large and profitable market to a single company when they have technology with which they can compete.

The doom and gloom is IMO about change from the current state, but I don't think zero competition is very likely, Intel has a tonne of competitors and every one of them is one product away from taking share from them in their core markets. Microsoft just has to compile a full blown Windows for ARM and a socketed ARM chip and board is released and you have direct competition. Plenty of games companies are already writing games for ARM so its not like this is a big step. If its not ARM then its another architecture, there are literally loads of them out there fullfilling their niche slowly growing a capability.

 

[strata8]

console chips only account for 4% of AMD's marketshare

But how much of their CPU revenue?

 

[SViscusi]

console chips only account for 4% of AMD's marketshare

For now. That number is only going to grow as time passes.

 

[Erenhardt]

console chips only account for 4% of AMD's marketshare

You have it wrong, or I misunderstand. Consoles account for 4% of global x64 market.

Now, If AMD had 15% of x64 marketshare, 4% is more than 30% of AMDs marketshare in that segment.

 

[lamedude]

MS buys most of AMD to save it and if Sony has any spare cash they'll chip in, but they play that game they did with GloFo so on paper its 51% AMD owned so they can say there aren't violating the cross license agreement. Or MS says screw it we're losing it ain't worth it, the plug gets pulled on the BoneStation, PC gamers celebrate, and despite being the only horse in the race the WiiU still loses.:biggrin:

 

[Anarchist420]

I dont want to see people lose their jobs, but AMD hasnt made much of anything I've liked since the Athlon 64 X2. but even then more than 1 core was probably not the best way to go. and Bulldozer was a majorly wasted opportunity. There was no reason (i guess their excuse was that they thought it would be good marketing) to clock the cores so high and it should've used fluxless solder like SB did.

But the only reason as to why there was only intel vs amd and amd vs nvidia is because of IP. AMD would've been gone a long time ago if it werent for IP while intel and nvidia would probably be much smaller.

 

[SlowSpyder]

At least for the graphics IP if for nothing else. But I have to imagine there is plenty of IP on the CPU side of things to be of value to a company or two.

Hi IDC!


I think AMD's CPU's are better than a lot of people realize, even if they weren't the right part for the market or a good business move. I see posts here and there poking AMD for having to use more cores to keep up with Intel's smaller core count, which is true to a degree. But, when you look at Intel's R&D budget (Intel's R&D budget last year was nearly twice AMD's total revenue!) and process advantage, it is somewhat a wonder that AMD's CPU's beat Intel in any benchmarks, and they often are able to at a lower price. I too think there is just too much there on the CPU side, and graphics, to not get picked up by someone if things really started to go tank for AMD.

 

[BrightCandle]

Hi IDC!


I think AMD's CPU's are better than a lot of people realize, even if they weren't the right part for the market or a good business move. I see posts here and there poking AMD for having to use more cores to keep up with Intel's smaller core count, which is true to a degree. But, when you look at Intel's R&D budget (Intel's R&D budget last year was nearly twice AMD's total revenue!) and process advantage, it is somewhat a wonder that AMD's CPU's beat Intel in any benchmarks, and they often are able to at a lower price. I too think there is just too much there on the CPU side, and graphics, to not get picked up by someone if things really started to go tank for AMD.

AMD actually called this one correctly, just too early. We are very much in the massive diminishing returns point with IPC and clockspeed and AMD decided instead of throwing transistors at a dead end they would go wider. The problem is the software guys couldn't do that change in that short period (they may not ever really do it). They ended up with the right product too early. I don't think what AMD does is bad, its just not as good a fit for todays software as they would have predicted it would have been some 5 years.

 

[TeknoBug]

It's not looking good for the future of AMD if it continues down the same path, none of us wants a monopoly from Intel or Nvidia, that means an i5 would probably sell for $500 instead of $220, you get the idea. An inusrance company in Alabama is monopolizing, and so is the power company in my province in Canada because there's no other company for customers to go to.

 

[sm625]

Worst case for AMD is: Ray tracing totally breaks out, PowerVR is leveraged by apple to produce graphics on a 3 watt device the rival 100w desktops. A game console with PS4 level graphics is released, driven by a $40 SoC and consuming < 10 watts. I do think vector graphics is better than this shader model crap, and will eventually supplant it, but who knows how fast it could be done. If its done fast, then AMD would be done.

 

[Abwx]

Worst case for AMD is: Ray tracing totally breaks out, PowerVR is leveraged by apple to produce graphics on a 3 watt device the rival 100w desktops. A game console with PS4 level graphics is released, driven by a $40 SoC and consuming < 10 watts. I do think vector graphics is better than this shader model crap, and will eventually supplant it, but who knows how fast it could be done. If its done fast, then AMD would be done.

PowerVR s so called ray tracing is years behind in image rendering whatever the spin they re running around their marvel, it will take more than their old trick, using interpolation to not have to render points wich do not substancialy change with two fps, to get to decent real time image quality as in the most advanced GPUs.

 

[bunnyfubbles]

But how much of their CPU revenue?

if past console deals are any indication, probably not a whole lot; I'd wager the buzz surrounding AMD powering the new consoles will probably do them more good by promoting desktop CPU/APU/GPU sales than any revenue they get directly from their console deals.

For now. That number is only going to grow as time passes.

not likely (see below link)

You have it wrong, or I misunderstand. Consoles account for 4% of global x64 market.

Now, If AMD had 15% of x64 marketshare, 4% is more than 30% of AMDs marketshare in that segment.

I think you misunderstand

http://www.pcworld.com/article/2148620/game-consoles-spur-amds-x86-processor-market-share.html

AMD x86 chips bought by Microsoft and Sony for use in their hot-selling game consoles accounted for 4 percent of AMD’s market share, McCarron said. Market share resulting from game consoles should remain consistent for AMD, McCarron said.

 

[TrulyUncouth]

Worst case for AMD is: Ray tracing totally breaks out, PowerVR is leveraged by apple to produce graphics on a 3 watt device the rival 100w desktops. A game console with PS4 level graphics is released, driven by a $40 SoC and consuming < 10 watts. I do think vector graphics is better than this shader model crap, and will eventually supplant it, but who knows how fast it could be done. If its done fast, then AMD would be done.

The chances of that happening are so small we might as well say worst case scenario for AMD is that a meteor hits their headquarters killing their engineers. I am a fan of ray tracing as much as anyone, but the chances of it taking off are already tiny and the chances it will be orders of magnitude more efficient than modern graphics are basically nil.

Even if that happened and Apple had a lock on all ray-tracing hardware I don't think it would spell doom for the consoles. Between exclusives, development software from Sony/MS, and the fact that they are already plugged into a wall means a hypothetical Apple console wouldn't be able to crush the current consoles.