Why AMD Still Matters
As I mentioned in the introduction to this piece, NVIDIA and Intel seem content to fight tooth and nail with each other while leaving AMD on the sidelines to watch.  If that is the case I would imagine AMD will be looking on with a big grin.  Why?  Because much of what NVIDIA and Intel are fighting over is what AMD has already discovered and implemented.  Let me explain.

Of the three companies in this debate today, Intel, AMD and NVIDIA, only one is balanced in the vision that both NVIDIA and Intel supposedly see for the industry.  AMD has both a CPU and GPU that are competitive in today’s market; not leaders in any definitive way but right up there none the less.  Thanks to the acquisition of ATI by AMD nearly two years ago the combined organization seems poised to capitalize on the shifting dynamics in the designs of both processing dynamics.  And much of what Intel and NVIDIA are doing today is actually validating what AMD has done over the past 24 months.

Intel as a processor manufacturer is attempting to enter into the world of discrete graphics while increasing the performance and functionality of their IGP-based chipsets.  They have also announced plans for their first CPU with an integrated, on-die graphics controller with the Nehalem.  AMD has already accomplished these tasks by purchasing ATI for their discrete graphics product as well as their chipset and IGP division and AMD’s Fusion technology roadmap also shows processors with integrated graphics cores.  Rather than purchase a graphics technology Intel has gone the route of developing their own; this is interesting because at one point many speculated Intel and NVIDIA merging but internal executive squabbles apparently killed that option.  So while Intel and AMD appear to have similar goals in this area, AMD obviously has the advantage: AMD Radeon discrete GPU technology is already available and is widely accepted by the gaming and GPGPU communities and I wager when on-die GPU graphics comes to both Intel and AMD CPU cores that AMD’s implementation will offer superior GPU performance.

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Slide from AMD Analyst Day, Dec 2007

Intel is also actively pursuing advances in their IGP solutions and are claiming to have 10x performance increases by 2010 and while this sounds impressive at first, I would fully expect AMD’s and NVIDIA’s IGP solutions to remain dominant in gaming performance.  NVIDIA will likely see their IGP chipset market share fall in the coming years as both Intel and AMD focus on producing complete platforms even if they verbalize a commitment to open solutions.  I would see NVIDIA dropping chipsets for Intel nearly completely with the coming Nehalem processor and solely offer solutions for AMD because of the two processor companies, AMD is more interested in creating partners than Intel.   To the point though, we see that AMD has the solution that Intel is pursuing in a competitive IGP solution for visual computing.

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AMD’s 780G chipset supports PCIe 2.0 and the fastest IGP graphics to date

This mix of components that AMD offers puts it in a great position for the coming NVIDIA and Intel war.  While NVIDIA struggles to find its footing in the world of CPUs and Intel fights to produce a graphics product the ISVs don’t berate, AMD is sitting pretty with a competitive balance of both.  And much of what happens next will depend on the market and who in this fight convinces software vendors to jump on their side.  Should NVIDIA convince developers to write for CUDA or GPU-based software in general or if Intel persuades them to stay with their CPU and dramatically different GPU design, AMD will have a solution for both fronts putting them in a position to capitalize either way.

There are other reasons that AMD will continue to be relevant despite the NVIDIA and Intel technological scuffle.  With today’s product line up, NVIDIA is mostly a one-trick pony that depends on the PC gamer, enthusiast and high-end graphics developer for success.  We have seen more than one omen that PC gaming is on a downward spiral (though it will likely pick up again in future) and as that market shrinks NVIDIA will continue to be squeezed.  Should discrete graphics fall to depressingly low adoption levels have some have speculated then IGP solutions will become vastly more important.  I already mentioned that as we move forward both AMD and Intel would likely be pushing NVIDIA out of the chipset/IGP on their platforms so obviously if that occurs in conjunction the downturn in discrete graphics sales, NVIDIA will likely suffer.  AMD would also have an advantage over Intel if this happens since its IGP solution will be more powerful than Intel’s for several more years at least.

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NVIDIA’s guess of Intel’s IGP performance in 2010

AMD has stated that they aren’t worried about Intel’s Larrabee product though I wager more than a few heads are spinning on how to deal with it.  There are two situations really that AMD could face with Larrabee: 1) it could fail utterly, and leave NVIDIA as AMD’s main competition in this area or 2.) it could become AMD’s main competition, with or without NVIDIA in the picture.  If the latter option turns out to be the case obviously AMD will have to answer back but thanks to their platform approach (that NVIDIA currently doesn’t have) AMD will have a better chance of surviving and competing financially.

The problem with all this discussion on AMD is that depends on it surviving in short term.  From a financial perspective the company continues to look grim and a profitable Q3 2008 looks like more optimism than realism; obviously Hector Ruiz made this claim before the delays and scuffle involved with the Phenom and Opteron K10 launch.  While the long term battle plays out AMD will still have to fight off NVIDIA with discrete GPUs as well as Intel on the server and desktop processor front; these are not cheap fights by any means but they are necessary for the company to stay alive and see its long term vision realized.

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AMD’s stock has seen better days…

So while I think AMD is in a great position with its current technology and future architecture designs in both the CPU and GPU divisions, its success is far from guaranteed.  In an odd manner of looking at it, both Intel and NVIDIA would love to be in AMD’s position; having a good mix of both CPU and GPU designs appears to be the right balance for a processing company going into this period of varying computational models.  If AMD can turn its immediate problems around, finances and personnel, their corporate strategy seems sound and even validated by the battle going on between Intel and NVIDIA.  Why both sides would somehow dismiss AMD in this debate confounds me as I can only imagine it is because both organizations feel AMD might be down for the count; I can’t help but wonder if taking their collective eyes off the immediate competition will give AMD a window to come back strong.  Time will tell and there is much to be decided, but no one should could AMD out yet.

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