Intel Gets Start of Antitrust Backlash from OEMs

[enigma067]

Intel Gets Start of Antitrust Backlash from OEMs

By Erik Sherman | Jan 4, 2010

A recent announcement that Lenovo would use CPUs from AMD (AMD) in a couple of its ThinkPads rather than chips from Intel (INTC) is the beginning of the price the chip giant could end up paying for its alleged anticompetitive activities: OEM customers shifting their orders.

In two separate statements, Lenovo said that it would use AMD chips in the ThinkPad X1003e ultraportable as well as the 13-inch ThinkPad Edge series, which is aimed at small- to medium-sized businesses. This is the first time that the ThinkPad brand, originally owned by IBM, will have used non-Intel chips:

An ultraportable PC positioned between a notebook and a netbook, the ThinkPad X100e can be equipped with AMD’s Athlon Neo single-core and dual-core, as well as the Turion dual-core processors. The ThinkPad Edge model, the smallest of three offerings in this product family and targeted at small and midsize businesses, may be paired with dual-core AMD Turion and Athlon Neo processors. The 14-inch and 15-inch ThinkPad Edge versions will still be powered by Intel’s Core 2 Duo chips.

Before you say, “But those are the small systems,” remember that the smallest systems, like netbooks, are the ones whose sales are really growing. To put it differently, AMD may not be in the prestige machines, but they’re going into the ones that may get the greater volume sales.

Starting in mid-November, I began noting that the upshot of all the antitrust activity focused on Intel would be customer defections:

PC vendors get completely wary of being sucked into the investigatory void and start shifting a significant portion of their purchasing to AMD. Forget fines and forget legal fees. That’s going to be the real price tag for years of allegedly using money and influence to keep a competitor constrained, and it will be a number with a whole lot of zeros.

I think the Lenovo switch is the first sign of that real price tag. Who knows how large a card it will need to be to record all the potential long-term loss for short-term gain?

Image via stock.xchng user MeHere, site standard license.

http://industry.bnet.com/technology/10004584/intel-gets-start-of-antitrust-backlash-from-oems/

 

[verndewd]

elmo was a dell hitman sanctioned by mi6 to "take out" AMD sales men 😛 and were not talking wine and dancing and dinner 😀

 

[randomizer]

Vodka martinis only.

 

[verndewd]

he was also part of the blue beam project , they failed in taking jim beam out of the liquor stores , i guess their booze tasted like moose hair 😀 little known fact about haarp is that he found out you cant make a bajillion wat GPU that plays video games in the ionisphere, its does however, blow holes in the troposphere and ionosphere and makes an efficient meat cooker.

:lol: :lol: :lol:

 

[bigwater]

:lol: LMAO

 

[verndewd]

Should Joe 6-Pack have to get a Ph.D. in Electrical Engineering just so he can watch Dancing with the Stars on his TV? 😗

yes ( accompanied by a fist slam on the table and a very self righteous look)

back on topic

90 or 65nm athlon 64 was 76 ish sellable dies per wafer @ 200mm not certain if GF is all 300 , wafer capacity was like 112 ish maybe 122, phenom 2 yields are around 50 ish or more, dresden does 55k wafer starts a month ny will add 35k per month I think net books and small devices will become the common market chip arena in the future.
at 45nm thats alot of chips, makes sense that GF is courting other business to fab for and incorporating gate first tech to be flexible. 32nm being so near thats that many more chips so oems should be well supplied especially after ny comes online.
I had all those links in one post and the page died before i posted it
http://www.pcper.com/article.php?aid=567

At 280 mm square+, Phenom is a large chip. Even when fabbed on 300 mm wafers AMD can only place approximately 200 complete dies per wafer, and using the Murphy Model Yield, only about 60 good dies are gathered per wafer. Consider that each wafer costs about $3000 to $5000 to finish, and not counting packaging costs, each raw die is worth between $50 and $83. Once you consider finishing costs and company overhead, it is no wonder that AMD’s margins are pretty low. Not all is lost though, as AMD is able to do some things to recover bad dies, as well as utilize partially defective dies as their triple core options.

65nm quads

120 @ 45nm x55k= 6.600,000 estimated useable cores per month separated into consumer and server fields then device and oem and parts sectors etc and I have no idea what those percentages are but I am certain the numbers exist somewhere 😀

 

[qurious69ss]

PII on 45nm is 260mm2.

 

[verndewd]

PII on 45nm is 260mm2.

yeah that article was 65nm. just trying to guesstimate market 'saturation ' numbers. bings search algo is crap , tough to find stuff you really want or need. before you suggest google,,,,, they are evul you can see it in their googley eyes 😱

 

[qurious69ss]

yeah that article was 65nm. just trying to guesstimate market 'saturation ' numbers. bings search algo is crap , tough to find stuff you really want or need. before you suggest google,,,,, they are evul you can see it in their googley eyes 😱

Good luck. Too many variables especially with a foundry business. I mean even if the 55k number is a fixed number you still have to figure out how many of those are CPUs. I would expect orders to change from one product to another in a week to week basis and with cpu, gpu, and arm all fighting for tool space it can get pretty interesting.

 

[jimmysmitty]

Depends on what you mean by notable.

AMD are basically now selling every cpu they make but then again more cpu's are being bought.

You won't see a really 'notable' increase (if by notable you mean intel losing up to 10% share or so) until the new fabs are finished and AMD can really flood the market with cheap bulldozer parts.

Even then until AMD can match or exceed Intel in terms of production there will never be a 50/50 market share. Even with one more FAB it wont match Intel in terms of production capacity.

Besides I would expect multiple CPUs to be in each OEM for choice.

AMD will only gain market share as well if they give something that totaly outperforms Intel, not just in gaming like we see.

 

[JAYDEEJOHN]

By that point, its 32nm isnt it?

 

[JAYDEEJOHN]

jimmy, thats assuming the pie will grow, cause if AMD does indeed have 50%, Intel wont need all its fabs

 

[verndewd]

Even then until AMD can match or exceed Intel in terms of production there will never be a 50/50 market share. Even with one more FAB it wont match Intel in terms of production capacity.

Besides I would expect multiple CPUs to be in each OEM for choice.

AMD will only gain market share as well if they give something that totaly outperforms Intel, not just in gaming like we see.

not true since most pc users in the consumer market wouldnt know outperforming chips from outboard motors. 80-90% of pc consumers make choices based on how the product suits their needs and price and will easilly do amd with a lower price and same functionality for general home pc use.

 

[qurious69ss]

So are we to assume that the spin off of fabs means absolutely nothing and its business as usual for Amd? Or will GF be a separate entity whose sole interest is to make money for GF and what Amd wants comes second. I also wonder how Amd will "pay" GF to manufacture chips for them. On the other hand, Amd can go to any foundry they want and have them manufacture chips for them so technically they are no longer constrained.

 

[jimmysmitty]

not true since most pc users in the consumer market wouldnt know outperforming chips from outboard motors. 80-90% of pc consumers make choices based on how the product suits their needs and price and will easilly do amd with a lower price and same functionality for general home pc use.

You forget that the largest part of the market share rests in server and business. Until they can create a CPU that outperforms in those segments their market share wont increase as much.

Wish we had a number of how many CPUs each company makes so that we can figure how much each could max their market share at.

 

[jimmysmitty]

So are we to assume that the spin off of fabs means absolutely nothing and its business as usual for Amd? Or will GF be a separate entity whose sole interest is to make money for GF and what Amd wants comes second. I also wonder how Amd will "pay" GF to manufacture chips for them. On the other hand, Amd can no go to any foundry they want and have them manufacture chips for them so technically they are no longer constrained.

Considering that AMD does not have total control I am willing to bet that the GF will work towards getting back the cash they invested then work on AMDs needs. Plus they will look for more income via other companies like that that TSMC does.

 

[qurious69ss]

I could be wrong but I believe that market share is broken down like this mobile first, desktop second, and server last. Margin wise though server first, mobile second, and desktop last.

 

[qurious69ss]

Considering that AMD does not have total control I am willing to bet that the GF will work towards getting back the cash they invested then work on AMDs needs. Plus they will look for more income via other companies like that that TSMC does.

So you believe that GF will always have Amd first and all others will have to wait in line. How about the cost to manufacture, is there anything out there that shows how that going to work?

 

[JAYDEEJOHN]

Ummm, profits dont just work one way here. If GF gains profits, so too does AMD, even off their own chips.
As for being able to pay for them, what I just said, plus, they already have a 600million dollar overhead taken out of the way in the x86 licensing fees

 

[JAYDEEJOHN]

This topic has been closed by Jaydeejohn

 

[JAYDEEJOHN]

This topic has been reopen by Jaydeejohn

 

[JAYDEEJOHN]

Dang mouse heheh

 

[sighQ2]

I don't see a link at all.

The business world is cut throat, dog eat dog, Capitalism. It's all about maximizing profits... there is no morality tied to what companies do. When companies do something we perceive as being "good" it is because they've found what they think is a new market to exploit what it is we find to be "good". In essence the incentivization of "good".

In this case... the fact that Lenovo chose that particular CPU could be for various reasons. It fits the power envelope, it is priced appropriately and it performs adequately based on the aforementioned benefits (what I have mentioned are not absolutes but rather "some" of the reasons why Lenovo could have picked that AMD CPU they did).

As another user mentioned, IBM and AMD are pretty much tied to the hip and have been for some time now (working and funding process technologies). I understand that Lenovo is no longer owned by IBM though which does seem to indicate that this line of reasoning doesn't totally add up.

I don't know much about the author but I would think that perhaps he is a tad bit subjective because anyone who is truly objective would notice that the pieces of the puzzle don't fit (as the author claims they do). In other words the way the author links the Intel anti-competitive practices to Lenovo's adoption of an AMD CPU is purely circumstantial/assumption.

Surprisingly, to some, I agree with most of what Elmo says here.

However, this line
"the way the author links the Intel anti-competitive practices to Lenovo's adoption of an AMD CPU is purely circumstantial/assumption"
doesn't quite make it; although is gets close.

This event, at this point, is little better than more spin, and that spin is perhaps somehow intentionally influenced by spintel.

Look at the details in the article - AMD gets a cpu in one of three of the Edge Series. And that is the bottom of the totem pole.

This is merely a publicity stunt - o poor spintel losing share - WAAA

But really what's happening, spintel is still getting 99% of the pie, with not only the edge line, but also the lenove line. AMD is getting a few crumbs - this is hardly a backlash or a coup in share - this is mere bs and the approach of the article is mere FUD.

If this is a trend and continues with lenovo and other oem's, then it will be for real. But for now, with a few petty crumbs for AMD, this is merely the new form of antitrust conspiracy. spintel will not stop until it is stopped. If it is stopped, it will be a break up.

 

[jimmysmitty]

So you believe that GF will always have Amd first and all others will have to wait in line. How about the cost to manufacture, is there anything out there that shows how that going to work?

No the opposite. AMD wont get first bat. I think They will have theirs but not priority.

Ummm, profits dont just work one way here. If GF gains profits, so too does AMD, even off their own chips.
As for being able to pay for them, what I just said, plus, they already have a 600million dollar overhead taken out of the way in the x86 licensing fees

Only off their chips. Not every chip. GF will profit off anything else non AMD.

 

[JAYDEEJOHN]

So, AMD no longer owns any part of GF?
And, as i have to keep telling everyone, their gfx chips will actually end up cheaper, as theyll make part of the profit on the markup, whereas that was non existent with TSMC

 

[qurious69ss]

Ummm, profits dont just work one way here. If GF gains profits, so too does AMD, even off their own chips.
As for being able to pay for them, what I just said, plus, they already have a 600million dollar overhead taken out of the way in the x86 licensing fees

Interesting, so they will pay GF to manufacture for them, but in turn GF will pay Amd back if GF makes a profit. A question I have is exactly how is Amd going to pay GF. Will it be a fixed number or will it depend on how many wafers or maybe they will pay only for good die and GF will have to eat the losses.