AMD: The Rise, Fall and Future of an Industry Giant

The only problem with that scenario is that AMD filed suit in June 2005...and AMD faced CPU shortages from mid-2004, presumably while being shut out of the major markets-cutting prices to boost sales and not having enough fab capacity to sustain the channel. The fab capacity supposedly being constrained because of money lenders shying away from providing funds to AMD for manufacturing construction (due to Intel suit and presumably not having much faith in AMD's 1991 antitrust suit against Intel) and AMD not seeking capacity at other foundries

Maybe a plan B as far as manufacturing capacity?- it's not as if the signs weren't fairly obvious before things ground to a halt (this article from 2002 for example). Then of course, there were a few fingers pointed at Jerry " Mr Flamboyant" Sanders as to how AMD's relationship soured with Intel in the first place:

And of course, while everyone remembers that AMD won the suit stemming from antitrust litigation ($18m), it should also be remembered that Intel also won its suit against AMD ($58m), and secured copyright for their microcode and legal precedent for limiting licenced clones as early as 1989 ( part of the judgement in the Intel v NEC case)- so maybe a plan B might not have been such a bad idea.
Of course, each to their own. As I noted in the first line of the article: "AMD has long been subject of polarizing debate among technology enthusiasts. The chapters of its history provide ample ammunition for countless discussions..."
Anyhow, thanks for the discussion. Gives a chance to add some additional content to the dialogue.

This does more to prove my point correct than anything. AMD worked on the lawsuit for years prior to filing it. I would imagine Intel did what it could to "fix" the problem when it knew it had a problem. Intel f'd over AMD illegally to beat em down. That's what it took, Intel had 10 times the amount of cash of its rival and yet they had to resort to this, AMD has been paying for it ever since.

That was a good read.
Thanks!

Not really, because you are only focusing on one issue!

Great read.

I hope the next article will not be:

A plan B is out of the question. Do you know it takes a FAB machine about 3 months to print a wafer, interesting fact. Do you also know each generation of chip need new FAB's to designed built and tested before they go into production. I think I recall the cost for a new FAB to be in the billions. Having a plan B is not a option.

as far as I know it's the main issue.

Which I find irrelevant when looking at all the other issues. DBZ pointed out that supply was hurting as well as demand. If that's the case how can you point a finger solely at demand being the main issue? From what I'm reading, AMD was and is hurting regardless of what Intel did. The reason Intel was being blamed is because AMD wanted people to think it was anyones fault but their own.

Note the article I linked to was dated January 2002, also note that the X-bit article was dated August 2004. Allowing your 3 months (that would assuming that the process and lithography masks are directly compatible with the new foundry)- and that is assuming that AMD were aware of the same supply constraint problems no earlier than mainstream tech sites!- that would imply AMD could have alleviated the issue by Nov/Dec 2004 (or mid-2002 if they indulged in the same strategic analysis that TMF posted).
Your original premise was that Dell's change of heart and ordering caused the shortage. Dell signed contracts in late 2006, yet AMD chip shortages were reported over two years prior to this date- and predicted five years earlier.

A earlier post of mine argued that point. AMD supply issue wasn't a cause, but and effect of Intels underhanded business practice.

How so??

Was Intel paying AMD's supplier to halt production? This would be the only way I see Intel being blamed for AMD's supply shortage that was briefly mentioned in the article.

Well I know on the gpu side it takes 5 years to design a chip, and design a fab to get a product to market, it costs billions of dollars. It takes 3 months for a single FAB maching to produce 1 wafer full to chips. CPU's aren't much different. On the surface AMD was short but the designing and planning happened years ago. AMD projects what they would expect for sales a long time in advance. On the surface it might look like AMD screwed up, but AMD was dealing with a market that was unfairly adjusted. Reality is a different story, AMD was cheated. By the time AMD had a problem sorted out the die had been cast. Intel started paying off distributor around 2000, maybe sooner, AMD noticed it fairly soon and had to build a case against Intel, it took almost of the 5 years. Meanwhile how do you project a future on something like that, it's all about supply and demand then numbers are worked out based sale projection. All I see is when AMD was better than Intel nobody would buy em, and when the lawsuit was finally out there, the damage was done. Even if AMD had unlimited cash, the time it would take to ramp up production would have been to long, and have not made a difference. AMD only had a short window of time before the Core2Duo's where out, that window was less than a year. Think about it, if it takes 3 months for a FAB to finish what it had started, then get it retooled for another process, your looking at 6 months before you see any chips. (I would need more specifics in the propef context to validate the writer opinion on AMD shortages). When AMD finally was allowed to sell it's CPU's on a fair market, of course the demand went up beyond what they could produce. It's not AMD fault. Intel payed AMD 1.25 billion in damages and was allowed to spin off it's FAB's. Prior to the lawsuit AMD's 8600 liscensing agreement with Intel limited the amount of outsourcing AMD could do at the time, something like 15 to 20 percent could be outsourced. The rest had to be made by AMD. The writer has little understanding of this time in AMD's history otherwise he wouldn't be so superficial with the context of some of the facts he's referring to.

So what are we comparing here the 5 years that illegally Intel payed of distributors, or AMD's supply problems for say 1 year. At what point do the illegal actions of Intel have no factor.

20% is the figure usually associated with the 1995 and 2001 agreements, and usually quoted in relationship to the Globalfoundries spin off.
So: AMD x86 outsourcing allowed: 20%
AMD x86 outsourcing initiated prior to the shortages apparent in 2004: 0%
In fact it wasn't until two years after the first warning signs that AMD even approached another foundry (Chartered- who started production in May 2006) and even then, AMD only used ~7% of the 20% outsourcing allocation they were entitled to under the agreement ( one thousand 300mm wafers/month compared with 30,000 200mm wafers from AMD's Fab 30) .Fab36 was also technically producing wafers also, but likely still at testing/tooling validation stage.

So, even though by (at least) January 2002 it was readily apparent that AMD needed more manufacturing capacity, they did not act until November 2004- almost three years later- to initiate a second source of production...and even then, did not utilize the full quota allowed for under the terms of the agreement

So why didn't AMD move to maximize the 20% ( or the remaining 13% after Chartered's production) as soon as the ramping estimates had been drawn up -presumably in early 2005 ? AMD could obviously benefited from the extra capacity from the get go.

Seems like an odd coincidence that under Jerry "Real Men Have Fabs" Sanders, the idea of outsourcing never saw the light of day:

...and that it wasn't until Hector took the reins that AMD (sans Sanders!) started softening its stance on outsourcing

Would you like me to insert a LMGTFY link? There's more than enough evidence on the net. How about processor shortages and constrained capacity in 2001? How about this one?

Thanks for that. I've used what little understanding I possess to provide some documented facts and some historical links. YW.
EDIT:

One year? You're basically looking at 2001-2007 (when Fab 36 came online) at the very least...and that without taking into account AMD's recent problems with GloFo

Well. I don't remember saying anything of a kind either now or in the article...or is it an all or nothing proposition for you? Adding hyperbole doesn't strengthen your argument.

The article completely missed the misstep of trying to integrate ATI's graphics card designs with AMD's cpu designs. The teams had to use the same architectures which hurt performance.

Morally and perhaps technically, AMD is the clear winner .. however Financially they are arse end up over a barrel

Well that is crap. NVIDIA and AMD play tag with each other every time one of them releases new architecture. If it is not one of them beating the clock speeds of the other is it a crippling round of crappy drivers from one side or power consumption, or anything else really. It has always been a back and forth and who ever is on top will change three or four times before another twelve months is through.


That last line about the GPUs just killed the credibility of your comment...

Great article and very realistic with constructive criticism, compared to the one on tom's with the usual BS like the future is fusion/vision, etc.

The recent "bold strategic move" of AMD to ARM suggests that something is very wrong. Looks like they want to enter the ARM business but only 2nd to everyone since their license doesn't allow modification of the design like the other half dozen competitors'.
As you say, Graham, it's "own mismanagement, some bad predictions" and I would add that they lack good common sense, since this is the second time AMD shift focus, the last time was 6 years ago announcing fusion/vision after burning $ 5.4 bn for ATI, and in the meantime producing a spectacular failure in their main business like Bulldozer which is more like a modern Netburst. At least they are competitive in PC graphics but they don't excel financially and have superior competitors in HPC with Tesla, and now Xeon Phi.

I didn't know what to think back in 2006 when AMD bought ATI but now I'm sure it was a huge mistake and it is the main reason why the company is in that mess.

1st, the whole idea of the merger was a vision of fusion only on paper as the future for AMD.
Fusion was not even technically feasible until 32nm. Anyway there is at least the TDP as a limiting factor to a SoC so massive and complex which means that performance can never match the high end range nor can be the most efficient.
As for the real application, most software is not ready for such parallelism, in fact only a fraction can run on so many cores like rendering and decoders/encoders.

2nd, it was an expensive acquisition by a company that has barely made a profit and the alternatives were plenty to say the least.
It has puzzled me for a long time why AMD wanted nVidia or ATI so badly. I guess easy-come easy-go: after 2-3 years of fat profit common sense was gone.
The cheap alternatives make more sense when realizing that AMD needed only a platform to compete with Intel. And I don't mean VIA as it is best left in its niche x86 position.
The first candidate would have been SiS as it offered a full chipset with graphics, sound and networking while being quite cheap and stable. Now SiS has vanished from the PC marked.
Other candidates (better than ATI chipsets) were Broadcom, a server chipset and network chip maker, or ALI/ULI, a chipset maker, which was bought by nVidia. As for graphics chips (good enough to be integrated) there were PowerVR, now only in ARM SoCs, or Matrox Graphics. For network and sound chips there were quite a few companies to choose from.

But history has been made and AMD needs to focus on the future. I hope they learn from the mistakes and know what to do with some good common sense.

I never used AMD and I never will.

I just bought an FX8150. After trawling through countless online benchmarking and comparison websites I observed that the i7 2xxx series was the main competitor to this chip.

In some benchmarks the i7 2600 chip yields a 10% to 15% performance advantage; but this advantage involves swallowing a ~200% price hike; and those numbers just don't add up. I use Cubase and do some gaming and other stuff; and this AMD processor rocks. There's no other way to say it. I'm now running Big Mixes with plenty of complex software instruments and processor-hungry effects and the thing barely gets past 10% utilization. It is more than adequate, even without overclocking. It's very well suited indeed to parallel-optimized tasks and the Intel just ain't worth the extra dollar for me.

It's like people are held in some kind of weird mind grip by Intel's secret coven of sorcerers.

Wake up and smell the coffee, people. It is what it is; which is a chip manufacturer offering great value for money.