News Intel Engaging in 'Semi-Destructive' Actions Against AMD, Says Firm

[TerryLaze]

No, not every Company does it. I won't deny they'd love to be in a position where they could. Well, their shareholders would. It sure helps the stock and Company valuation being so big and powerful you can bully your competitors out of the market.

So no. I'd love to join the bandwagon of "all Companies do it; it's normal!", but no. On one hand, as consumer, this behaviour hurts us by having less choice and options and on the other it's just watching big bullies be bullies and almost celebrate their behaviour.

Do you like sayings like these?
"The big and strong have the right to mistreat the small and weak".
"Law of the jungle: the strong eat the weak".
Etc.

Just like you use Apple as a bad example, whatever Intel is doing, in the long run, does not help consumers and only their own share value. And the "why does no one think of the poor engineers!" line doesn't apply. If there was more competition in the space, there would be way more positions to fill. Margins would probably be lower, but that's how competition works.

Regards.

No, that's not how competition works!

What you talk about that you want is a Cartel, that intel restricts the amount of CPUs it produces(control supply) and adjusts their prices closer to those of AMD (regulate prices) .
https://www.investopedia.com/terms/c/cartel.asp

A cartel is an organization created from a formal agreement between a group of producers of a good or service to control supply or to regulate or manipulate prices.

 

[digitalgriffin]

The only thing that explains a Market dropping on a GOOD jobs report is Fear and Greed .... It's NOT a logical response to good news, it's an emotional response

Tight labor supply equals higher wages.
Higher wages mean inflation
Inflation means less profits
Inflation means FED raising rates
Raising rates means less profits and business debt.

 

[cyrusfox]

Intel's best ability is their availability. This supply being destructive to anyone's future is very effective at getting clicks, but at its heart it is an uninformed prediction by an analyst. We are coming out of a tight supply to oversupply conditions on the consumer space, and this truly benefits AMD over Intel as AMD has never had enough supply(Too conservative in its ordering).

Intel's Achille's heel is execution, AMD's is capacity. I see AMD weathering future storms much more effectively. If anyone needs convincing on this point, look at the continued margin differences between a vertical integrated Intel vs AMD which is a design house that contract out manufacturing.

 

[-Fran-]

No, that's not how competition works!

What you talk about that you want is a Cartel, that intel restricts the amount of CPUs it produces(control supply) and adjusts their prices closer to those of AMD (regulate prices) .
https://www.investopedia.com/terms/c/cartel.asp

No, you misread/misinterpreted what I wrote.

I know very well what a Cartel is and how it operates in the economic context. Having multiple companies compete in price is just that: normal competition. This implies they aren't in cahoots (a cartel: price fixation) to force the market to buy at a price. I don't even know why you jumped in that direction when I mentioned "more competition", what gives? xD

As for what Intel is doing, is not that, so I'm not saying that either.

The point I'm raising is very simple: in a perfectly balanced competitive landscape, all competitors will be similarly matched and compete without pushing any other too far out. This is what you usually see before "consolidation" happens, which is just another way of "big fish eats small fish" (or mergers) in the market until you have very few players getting bigger chunks of the market and start abusing their respective positions, because "that's just how it goes" and it's "Capitalism". What constitutes "fair" and "balanced", well, that is not my forte, but at least I can say the more skewed the market is toward one or another brand, the consumer usually ends up paying more. Whatever the reason for that is.

So no. Not what I was saying at all.

Regards.

 

[PlaneInTheSky]

AMD outsourced everything to Taiwan, including the CEO ironically. All in the name of extra profits for the CEO and shareholders.

This included backstabbing GlobalFoundries which US and German taxpayers paid for.

And now that TSMC is raising prices AMD has nothing competitive against Intel's i3 and i5 that are selling like hotcakes because Intel controls the manufacturing process.

Now AMD is stuck with a TSMC monopoly. TSMC can charge AMD anything they want since AMD abandoned their own GlobalFoundries in the West. AMD has no alternative to TSMC and TSMC knows it and will fleece AMD for all it can.

Serves AMD right for outsourcing.

 

[The Historical Fidelity]

AMD outsourced everything to Taiwan, including the CEO ironically. All in the name of extra profits for the CEO and shareholders.

This included backstabbing GlobalFoundries which US and German taxpayers paid for.

And now that TSMC is raising prices AMD has nothing competitive against Intel's i3 and i5 that are selling like hotcakes because Intel controls the manufacturing process.

Now AMD is stuck with a TSMC monopoly. TSMC can charge AMD anything they want since AMD abandoned their own GlobalFoundries in the West. AMD has no alternative to TSMC and TSMC knows it and will fleece AMD for all it can.

Serves AMD right for outsourcing.

So many things wrong here. Global Foundries provided the knife and pushed its back into it by abandoning any further R&D on 7nm and other process nodes smaller than 12nm back in 2018 forcing AMD to find a new advanced node manufacturer for zen 2’s CCDs. So what? AMD is suppose to take one for the team and design zen 2,3,4,5,etc. on global 12nm according to you? Grow Up

 

[Endymio]

So what? AMD is suppose to take one for the team and design zen 2,3,4,5,etc. on global 12nm according to you? Grow Up

Or they could do what Intel did and build their own fabs. Not using TSMC hurt Intel for years. Now they're benefitting from it. Grow up.

 

[Endymio]

As Rand pointed out many decades ago, the anti-capitalists have every base covered:

Sell your product for less than your competitors? You're dumping to destroy competition!
Sell your product for more than your competitors? You're gouging consumers!
Sell your product for the same price as your competitors? You're colluding to set prices!

 

[palladin9479]

Greed and Fear are both base emotions and the Markets run on Fear and Greed and thus the Market is run on base emotions .... not logic, emotions .... Proof of that is lately whenever we have a strong jobs report meaning more people are working and also getting paid more then the Market drops .... The only thing that explains a Market dropping on a GOOD jobs report is Fear and Greed .... It's NOT a logical response to good news, it's an emotional response

That's... not true...

We are in a slow roll recession because high inflation combined with the FED's interest rate hikes (to combat that inflation) caused existing investment capital to have less value while also causing future investment capital to be more expensive. It's more expensive to leverage debt to invest into future expansion, that causes companies to expand less. Inflation blew prices up, meaning consumers have less disposable income to spread around, causing demand to go down. That one two punch is guaranteed to trigger an economic recession, the FED's plan wasn't to stop the recession but to flatten the curve and turn it into a slow descent instead of a sudden market panic. And honestly it's worked.

The jobs report is kinda of a lie, or rather a misunderstanding of statistics. The way it works is that it only counts people who are actively engaged in looking for employment, and that category includes those employed and who have been employed in the last 30 days (U3 report) or 12 months (U6 report). Once someone passes those time periods they fall off the report completely and are no longer counted in the statistics. Also if someone has never had a reportable job, then they will never be counted on any job report. What makes this important is that the COVID pandemic of 2020~2022 caused a massive amount of joblessness along with a massive amount of early retirements known as "The Great Resignation". Anyone who left the work force as recent as January 2022 ,and has not found a reportable job since, would not be counted in the U3/U6 jobs report. So while the U3 would be something like 3.4%, the U6 would be 7~8% and the actual unemployment would be well north of ~20%.

Note
For those wondering, this is how business investment works and why it's so sensitive to interest rates. It's very stupid for any business to pay cash for any investment or expansion, cash liquidity is valuable and is not deducted from revenue. Instead they leverage credit and borrow money to finance the expansion then use the revenue from that expansion to pay the interest of the loan. Borrow 1,000,000 at a 4% interest rate for an expansion that then generates 10% more revenue results in a 6% profit. Further the interest payments on that loan, $40,000 are assigned as a business expense and further reduce tax liability by that same $40,000. If instead that same 1,000,000 loan costs 7% the interest payments are now $70,000 per year so the return on that same 10% growth would only be 3%. If weaker consumer demand lowers that growth target to 6% instead then it would be a business loss to take that loan out.

 

[bit_user]

As Rand pointed out many decades ago, the anti-capitalists have every base covered:

LOL. Objectivist detected. Ayn Rand was a gifted storyteller, but an intellectual lightweight. Beware of anyone quoting her.

Sell your product for less than your competitors? You're dumping to destroy competition!
Sell your product for more than your competitors? You're gouging consumers!
Sell your product for the same price as your competitors? You're colluding to set prices!

Dumping is when you sell below-cost, for the purpose of bankrupting your competitors to establish exclusivity, so you can gouge customers.
Gouging is exploiting market failures to price excessively.
Collusion is conspiring with competitors to price excessively.

Don't believe me? Look up the definitions for yourself. It's readily evident that her remarks were either grossly misinformed or (more likely) merely pandering to self-pitying free market fundamentalists.

The solution to all three problems is sensible regulation, oversight, and enforcement.

 

[Endymio]

Ayn Rand was a gifted storyteller, but an intellectual lightweight.

Ad hominem isn't a rebuttal. And on this point she is correct. In this very forum, we simultaneously have people complaining that NVidia is "cheating" by producing too few chips, while Intel's cheating for producing too many. With a little digging, I'm sure I could find a collusion claim, and complete the trifecta.

BTW, one of Rand's acolytes agreed so much with her on this point that he wrote a book on it. He later became head of the Federal Reserve-- Alan Greenspan.

Dumping is (snip).
Gouging is (snip)
Collusion is conspiring with competitors to price excessively.

Wrong on every single point! As space is limited, I'll simply dissect your last one. Quoting from the FTC's page on price collusion:

"Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels....."
Price Fixing | Federal Trade Commission (ftc.gov)

There is no 'excessive price' requirement in the legal definition of collusion, any many companies have been fined for price collusion for setting prices low, rather than high. Furthermore, the "inference" portion of that definition is the real gotcha, as companies have often been found guilty even without any actual "conspiring".

 

[Endymio]

We are in a slow roll recession because (snip)
The jobs report is kinda of a lie, or rather a misunderstanding of statistics.....
this is how business investment works and why it's so sensitive to interest rates....

It's rare to see even a short post on these economics issues that doesn't contain numerous errors. Your post was excellent, but I will add, however, that you cannot say the Fed's plan "has worked" when inflation is still more than triple their target rate. There's one, maybe two more rate hikes coming in the near future. We'll see what happens.

EDIT: From a friend who manages a few billion in capital financing each year: 2022 was a good year for his firm despite rising rates, as most companies realized 2023 was going to be significantly worse.

 

[palladin9479]

It's rare to see even a short post on these economics issues that doesn't contain numerous errors. Your post was excellent, but I will add, however, that you cannot say the Fed's plan "has worked" when inflation is still more than triple their target rate. There's one, maybe two more rate hikes coming in the near future. We'll see what happens.

EDIT: From a friend who manages a few billion in capital financing each year: 2022 was a good year for his firm despite rising rates, as most companies realized 2023 was going to be significantly worse.

I mean "worked" as in

flatten the curve and turn it into a slow descent instead of a sudden market panic

The recession was going to happen the moment the US (and other countries) manufactured trillions of USD out of thin air and dumped it into the economy. You can not dilute available currency that much while simultaneously reducing GDP without catastrophic economic consequences. The FED's real goal was never to reduce inflation to some comically small number, that is just what they spread around and let the talking heads on TV tell everyone. The goal was to prevent a market panic similar to what happened in 08/09 and so far the market, while in a recession hasn't fallen off a cliff.

Inflation will only go back to the "normal" values when the excess liquid currency has been absorbed out of circulation and the GDP gets back on track for the next upswing. Inflation (real) and GDP growth are tightly tied together, if both are approximately the same value then it's break even. If GDP grows faster then inflation then people have more money, if inflation is higher then GDP then people have less money. 2020~2022 was a dangerous combination of huge amounts of money being dumped causing large real inflation combined with GDP going down.

 

[jasonf2]

I am honestly a little lost here. Intel is just using the same play book they have for decades. Why would you expect them to somehow be doing business differently? AMD's own market share grab was driven by dropping the price floor out on first gen Ryzen. Once they had a performance lead for a little while they just bumped their prices. At that point Intel just ran an old AMD play by low balling their lesser performing chips to keep market share. With raptor lake intel has taken a small performance lead and suddenly maintaining price is anti competitive? If you want to have a conversation about exclusive chip volume rebating, shady X86 licensing and aggressively using IP as market pressure Intel is really, really good at all of that stuff. But none of it is new and certainly at this point AMD's biggest issue is that TSMC is grossly increasing wafer price and selling their wares to anyone who wants to write the check. This adds up to AMD increasing prices with no real path to performance domination. This is especially true as Intel moves towards the fab/manufacturer agnostic tile structure on future chips.

 

[helper800]

There are few people I wont argue with on most topics discussed here, however, @Endymio is one of them, and econ is his schtick. He knows his subject matter and loads for bear. Usually disagreement with him is a disagreement with reality, at least on the topic of economics.

 

[TJ Hooker]

the actual unemployment would be well north of ~20%.

How would you define "actual unemployment"?

 

[palladin9479]

How would you define "actual unemployment"?

Total population of working age vs the percentage of that population that actually works minus those with a physical disability or in school.

Current percentages only capture those were working within the past year, anyone who hasn't had a job for a year or more completely drops off the statistic.

 

[The Historical Fidelity]

Or they could do what Intel did and build their own fabs. Not using TSMC hurt Intel for years. Now they're benefitting from it. Grow up.

AMD did build their own fabs, then AMD spun off their fabs to make Global Foundries in 2009, kinda like what Intel plans to do with their fabs. Only difference is I doubt Intel will completely divest over time their new foundry entity like AMD did in 2012. Kinda makes you think though, if AMD retained their equity in Global Foundries, they probably could have vetoed the decision to abandon advanced process nodes smaller than 12nm and would still be able to utilize Global Foundries services.

 

[bit_user]

if they prefect them and their chiplet usage , I think the need for lower end dedicated GPUs will be gone.

The only chance of that happening is the use of in-package memory, like what Apple's doing with its M-series SoCs. And it will never surpass even mid-range dGPUs, either.

We may even start seeing APU Mobos with slots for VRAM!(Been a prediction of mine for YEARS,

Nope. GDDR memory cannot be socketed. It has to be soldered down.

 

[bit_user]

Now who is having an Reading-comprehension fail....
Tom is presenting this article by making statements themselves.
They don't just have the link there with the article title, they also have words there that are not part of the article or of its title, those words are statements.

There is no proof in the article about how many CPUs intel is manufacturing only that they did market research to see how many CPUs the market could absorb, and even less than no proof that they do any of this to damage AMD.

That's just a summary of the article. It's just there to remind you of the gist of the news article, so that you know you're commenting in the proper thread.

This is a comment thread for an article. Comments should be about the article. If you didn't read the article, do not post. It's very simple, common-sense etiquette.

 

[bit_user]

A little commentary from Tom's on this article would have dramatically changed the perspective from looking like click bait to a Hey we are hearing this but so far not much evidence has been provided.

Wall St. research firms have deep pockets and access to non-public resources that a little web 'zine like Toms does not. Your expectations are way too high. Maybe you should be reading the New York Times, the Wall St. Journal, Reuters, etc., as they could potentially do the kind of investigation you want.

 

[bit_user]

Seems fine when Sony, Google, Apple and umpteen other business being business doing businessy things do it, no?

No. Google is being hit by lawsuits all the time, in various jurisdictions. The US DoJ just sued Google, in fact.

https://www.washingtonpost.com/technology/2023/01/24/doj-google-lawsuit-ads/

Imagine, competing through volume and value and having it be called self-destructive in a paid narrative.

Simple math can be used to show whether the discounting is at a level that's actually hurting their earnings. If so, then it's entirely legitimate to call it "destructive".

Seems like you might need a refill on that coffee.

 

[bit_user]

AMD outsourced everything to Taiwan, including the CEO ironically.

That's racist. Lisa Su was US-educated (MIT) and worked for US companies her entire career. Where she was born is irrelevant.

This included backstabbing GlobalFoundries which US and German taxpayers paid for. ... since AMD abandoned their own GlobalFoundries in the West.

Explain how GF was backstabbed. Part of the terms of their separate included AMD retaining a wafer-supply agreement with GF. Does that count as abandoning them?

AMD spun out GF as an independent entity. If it couldn't stay competitive on its own, that's on it. Moreover, I don't know how you can look at the history of AMD between the separation and the launch of Zen2, and conclude that either company would've fared better if they'd stayed together. AMD was hemorrhaging cash and without the money they got from the GF spinoff, quite likely would've gone bankrupt. How would that have been good for its fabs? Or, if it didn't go bankrupt, then only by virtue of siphoning off profits from the fabs that were needed by the fabs to try and compete in the manufacturing game.

The weakest part of your argument is that it ignores how Intel seems solidly on track to spin off its own manufacturing division. That's the endgame of the whole IFS strategy.

Now AMD is stuck with a TSMC monopoly.

AMD can use Samsung for everything except their latest top-end CPU and GPU chiplets. There are lower end compute, graphics, I/O, and cache dies which could be made on Samsung or even GF. In fact, didn't AMD just announce it was going to backport something to an older Samsung node? Ah yes, this:

https://www.tomshardware.com/news/amd-outsouces-older-chips-to-globalfoundries-samsung

TSMC can charge AMD anything they want

Not really. If they charge too much, then AMD can't compete and TSMC will lose a customer. It does give them more leverage in pricing, but I think that's a tradeoff AMD would make again, considering how it helped them leapfrog the mighty Intel.

Serves AMD right for outsourcing.

Definitely written like a disgruntled former employee.

 

[bit_user]

Ad hominem isn't a rebuttal.

Sometimes, an unpleasant fact needs to be stated. There's been a great wealth of economic scholarship, over the past century or so, and most of it is more worthy of citation than anything Rand ever said or wrote. Having said that, I should also acknowledge that she was an immigrant and lived in a time that didn't afford her the same educational opportunities that women currently enjoy.

In this very forum, we simultaneously have people complaining that NVidia is "cheating" by producing too few chips, while Intel's cheating for producing too many.

You're confusing consumer vs. investor points of view, which isn't a nuance that Rand quote seemed concerned with. The people whining about Nvidia are all speaking as consumers, while this research firm is looking at Intel's behavior on behalf of investors in the sector.

With a little digging, I'm sure I could find a collusion claim, and complete the trifecta.

Depends on whether it's legitimate. However, I think you put too much weight behind whiny and entitled gamers, compared with what investors and regulators are saying. You can literally find someone complaining about almost anything. Don't put them on a pedestal they haven't earned and don't deserve.

BTW, one of Rand's acolytes agreed so much with her on this point that he wrote a book on it. He later became head of the Federal Reserve-- Alan Greenspan.

Greenspan had a mixed history, in fact. His greatest accomplishment was an accident of timing. I believe the economy would've fared at least as well under most Fed chairs.

Wrong on every single point!

Sure, you can find quibbles. However, none as big as those errors in your original quote I sought to call out.

 

[bit_user]

Tight labor supply equals higher wages.
Higher wages mean inflation

Labor isn't the only thing in short supply. When any essential resource or service is in short supply (including things like fuel or shipping), then prices go up. When prices rise in a few sectors at once, it spreads throughout the economy and you get inflation.

The recession was going to happen the moment the US (and other countries) manufactured trillions of USD out of thin air and dumped it into the economy. You can not dilute available currency that much while simultaneously reducing GDP without catastrophic economic consequences. The FED's real goal was never to reduce inflation to some comically small number, that is just what they spread around and let the talking heads on TV tell everyone. The goal was to prevent a market panic similar to what happened in 08/09 and so far the market, while in a recession hasn't fallen off a cliff.

Inflation will only go back to the "normal" values when the excess liquid currency has been absorbed out of circulation and the GDP gets back on track for the next upswing. Inflation (real) and GDP growth are tightly tied together, if both are approximately the same value then it's break even. If GDP grows faster then inflation then people have more money, if inflation is higher then GDP then people have less money. 2020~2022 was a dangerous combination of huge amounts of money being dumped causing large real inflation combined with GDP going down.

This is a little too simplistic, as the role of supply chain disruptions certainly had an impact on inflation. You also can't ignore the impact of Russia's invasion of Ukraine on energy prices and certain key raw materials supplied by Russia and Ukraine (e.g. helium, grains, fertilizer).