Intel internal memo highlights competitive challenges AMD poses

Shawn Knight

Posts: 12,200   +120
Staff member

Lisa Su’s turnaround of AMD since taking over as CEO in late 2014 has been nothing short of remarkable. The chipmaker is putting up a much better fight – across multiple industries, mind you – and both consumers and investors have taken notice.

Chief rival Intel hasn’t turned a blind eye, either.

Penned by Walden Kirsch as part of “the latest in a Circuit News series on Intel’s major competitors,” the piece notes how AMD was the best-performing stock on the S&P 500 last year and enjoyed its second straight year of greater than 20 percent annual revenue growth in 2018. One of the reasons for AMD’s resurgence, Kirsch surmises, is its strategic re-focus on high-performance products in the desktop, datacenter and server markets.

Specifically, Kirsch highlighted AMD’s use of TSMC’s 7nm manufacturing process, victories in public cloud offerings and its next-gen Zen-core products as factors that will “amplify the near-term competitive challenge from AMD.”

As such, Intel will face “tough competitive challenges” today and into the near future, said Intel’s AMD competitive expert Steve Collins.

The company believes its 9th Gen Core processors will beat AMD’s Ryzen-based products in lightly threaded productivity benchmarks as well as in gaming benchmarks. With regard to multi-threaded workloads, Intel said AMD’s Matisse “is expected to lead.”

AMD gains a significant advantage in utilizing TSMC’s 7nm process – namely, a per-core frequency bump and lower power, meaning they can scale to more cores per processor. What’s more, Intel said AMD’s pricing will be significantly below theirs “so they’ll likely get good performance-per-dollar,” Collins said.

Digging in on the pricing argument, Collins had this to say:

It's not well understood that Intel actually offers the market a larger selection of product pricing. While the press often likes to focus on Intel's top price points being higher than AMD's top price, few people recognize that Intel also offers lower entry pricing than AMD. So Intel offers more price point choices to our customers.

Adding a bit of positive spin…

Additionally, I would say users don't buy a chip. They buy a system. They buy a whole solution that includes software enabling, vendor enabling, validation, technical support, manageability, out-of-box experience, supplier sustained consistency, and more. So, yes, while an OEM or ODM might buy a chip, the end user doesn't generally buy only a chip. We believe that our product pricing vis-à-vis AMD reflects the great deal of added value that specifically comes from buying Intel with our decades of unmatched investments in validation, software, and security.

And on the enterprise side…

Especially for enterprise customers, acquisition cost is just one part of the total cost of ownership. Customers using an alternative solution may need additional validation, optimization, debugging, and certifications - all normal cost adders when introducing a new solution in an IT environment. Additionally, some software is licensed per core and therefore more cores from the AMD solution results in higher licensing costs.

On the server side, Intel said its mainstream Xeon server products “will be challenged on throughput-oriented benchmarks that scale well with core count.” The chipmaker expects Xeon to have cache and memory latency advantages over AMD’s Rome product for servers and thus, be competitive “on applications that require fast response times and are sensitive to memory latencies like database, analytics, web serving, and so on.”

Also of interest is Intel’s viewpoint on the Cinebench benchmark.

In the longstanding industry debate over benchmarks - whose to use? - Cinebench is often used by AMD, since it favors high core/thread count and represents one of the best-case benchmarks for AMD. Intel believes that Cinebench is not a representative benchmark for general platform evaluations and real life workloads.

Intel’s self-professed “secret sauce,” which one employee said “makes me cringe,” isn’t a single ingredient at all but rather, its six pillars of innovation – process, architecture, memory, interconnect, security and software.

The write-up concludes with a Q&A session with Collins that expands on many of the article's earlier points. It really is an interesting look from the inside, even if it is spin-heavy in a few areas. It's also thought-provoking that not all employees are drinking the Kool-Aid.

Masthead credit: Intel sign by Sundry Photography

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wiyosaya

Posts: 5,129   +3,219
Sounds like typical management response to the situation where the ship has a big hole in it, and management sees a minor leak.

I specifically like this -
Especially for enterprise customers, acquisition cost is just one part of the total cost of ownership. Customers using an alternative solution may need additional validation, optimization, debugging, and certifications - all normal cost adders when introducing a new solution in an IT environment. Additionally, some software is licensed per core and therefore more cores from the AMD solution results in higher licensing costs.
Absolutely! Translation - Everyone should and, of course, will pay more because we are Intel. I N T E L!
 

EEatGDL

Posts: 738   +442
Not sure why Intel would need to convince it's own employees of the hidden benefits that Intel chips "might" offer its customers

Looks more like a propaganda piece that was written as an intended leak to the public
That has been happening for at least a year now, and we wonder the same thing.
 
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poohbear

Posts: 431   +306
Competition .... The Jet Fuel of technology
Just technology?

I was in Cuba last summer for 2 months and the restaurants are terrible!!! They have never developed their culinary scene because....nobody competed in it, private enterprise was banned. On the music front, they have some of the most incredible bands in the world....because there's lots of bands innovating and trying to one up each other.

Competition is very very good.
 
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mailpup

Posts: 7,547   +694
TS Special Forces
Just technology?

I was in Cuba last summer for 2 months and the restaurants are terrible!!! They have never developed their culinary scene because....nobody competed in it, private enterprise was banned. On the music front, they have some of the most incredible bands in the world....because there's lots of bands innovating and trying to one up each other.

Competition is very very good.
I know what you're saying but this is a technology oriented site so that's the angle most people here focus on.
 
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Evernessince

Posts: 4,998   +5,124
"They buy a whole solution that includes software enabling, vendor enabling, validation, technical support, manageability, out-of-box experience, supplier sustained consistency, and more."

Intel has failed to provide a number of these in the past year.

"It's not well understood that Intel actually offers the market a larger selection of product pricing. While the press often likes to focus on Intel's top price points being higher than AMD's top price, few people recognize that Intel also offers lower entry pricing than AMD. So Intel offers more price point choices to our customers."

By entry level here, I'm guessing they mean ultra-low end mobile processors. Otherwise there are athlon's around the $30 price point. I'd be willing to bet that market is very small for them due to ARM, that's where that architecture excels. This point is more or less irrelevant to the broader market unless Intel seriously starts developing a uArch to compete with ARM on mobile.
 

Dragonstongue

Posts: 16   +12
Intel is full on damage control mode
they just got a face full of sand from a recent cannonfodder participant

even Nv cannot stop talking #%$#%$# downplaying the fact that within effectively 1 generation AMD has "caught up" to the recently released and pricey 1xxx/RTX Nvidia.....and core I 9xxx while fast etc is a fire breathing beast to FEED vs the AMD chips, even than, Intel's supremacy is very very eroded and only the "true die hards" would not be juggling the decision VERY THROUGH.

AMD Ryzen 3xxx/x5xx/Navi or Intel 9xxx and Nv RTX
my $$$$$ and common sense says that AMD is going to be making a hell of a killing come the 7th through remainder of 2019-2020

the signs they are pointing to "AMD is to be taken serious, AND they are not greedy SOB asking price for what they DO DELIVER.. oh, and does not hurt that AMD/Radeon 99% of time are quite OVERBUILT and give you ALL FEATURES vs pay even more to "enable" and/or may not work as should for that $$$$$$$$$$$ you just shat out for them to laugh all the way to the bank, but wait, we have a SUPER card, because the one we just released is apprently "ancient" though Nv just released them, more $$$$ and more power use, Navi is less pricey, keeping up performance wise etc etc.

leather coat or not
Intel and Nvidia likely are "behind closed door" thinking themselves "bloody hell, Ryzen 2xxx was noticeably snappier, now this is likely 15+% faster yet at less power?...umm, we need to do something SUPER or will lose all sales for the rest of the year...Intel....FFS, how do we fight them now, drop the price when we are 10s of billions trying to get the one to compete with 2xxx out the door in full, now 3xxx on 7nm..ukkkkk..."

^.^
 

wiyosaya

Posts: 5,129   +3,219
"They buy a whole solution that includes software enabling, vendor enabling, validation, technical support, manageability, out-of-box experience, supplier sustained consistency, and more."

Intel has failed to provide a number of these in the past year.

"It's not well understood that Intel actually offers the market a larger selection of product pricing. While the press often likes to focus on Intel's top price points being higher than AMD's top price, few people recognize that Intel also offers lower entry pricing than AMD. So Intel offers more price point choices to our customers."

By entry level here, I'm guessing they mean ultra-low end mobile processors. Otherwise there are athlon's around the $30 price point. I'd be willing to bet that market is very small for them due to ARM, that's where that architecture excels. This point is more or less irrelevant to the broader market unless Intel seriously starts developing a uArch to compete with ARM on mobile.
The thing about pricing options raised my eyebrow, too. I could not help but think of the various and confusing choices for server procs alone. As I understand it, one ends up paying more for things like more pci-e lanes.

On Epyc, you get 128-pci-e lanes on all the procs no matter the cost.
 

Kanny

Posts: 9   +5
So now Intel has to come to this to restrict AMD from getting 15% market share in server just a big kid bullying the small one. I'm glad major companies such as Microsoft, Google etc partner with AMD. they have enough money and also want to bankrupt AMD. No matter what their explanations we should not listen
 

Tawhid

Posts: 6   +2
Not sure why Intel would need to convince it's own employees of the hidden benefits that Intel chips "might" offer its customers

Looks more like a propaganda piece that was written as an intended leak to the public
Because shareholders are keeping an eye on it.
 

Peter Farkas

Posts: 420   +218
Well done AMD for bringing competition back to the CPU market. We have been waiting to see Intel under such pressure for a very long time.
I am keeping my fingers crossed that we will be seeing such competition for a long time that will result in more innovation, lower prices, better value and good progress.
 
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Bubbajim

Posts: 720   +694
Not sure why Intel would need to convince it's own employees of the hidden benefits that Intel chips "might" offer its customers

Looks more like a propaganda piece that was written as an intended leak to the public
I see it as part of their softening up people to lay-offs. I believe that Intel has already had some significant lay-offs in 2019 and my guess is, more are coming. This piece will be part of a wider strategy whereby they're able to say "well, we did tell you challenging times were coming...".

That, and shareholders will be asking questions about AMD vs Intel and they want a spin piece that says, "we know how this looks..."
 

JaredTheDragon

Posts: 679   +431
It's certainly curious to watch the intelligence community hobble itself like this, as well as the technical aspects of the Zen 2 arrays. It's like watching a Ford Mustang vs a Nissan Skyline, and almost as fun. Of course Intel as a brand was fading out and intelligence needed to shift brands. There's nothing sassy or saucy about NAMING your own company after yourself unless - wait for it - you're a bank.

AMD has always had the better methods. The Dozers/Piledrivers were hobbled on purpose, but even now they're still great processors. Intel as a brand was meant to sucker anyone and everyone who didn't care, and that worked flawlessly. But as enthusiasm grew, and it certainly HAS, AMD's usefulness has increased and thus their apparent success. It's not like Intel didn't have financial access to the same foundries, or enough to build their own.

It's just Intel's turn to get hobbled, now. Yin/yang. The same people own both companies, so all this debate is really just a manufactured advertising campaign. Guess what, we all fell for it.