Thursday, December 28, 2006

2007 -- A Year Of Promise

Tomorrow will be a new year. A lot of people will be looking for the Q4 06 results and making predictions for Intel and AMD in 2007. However, given what I've heard in the last couple of months it will be difficult to sort the wheat from the chafe. I'd like to look at where things are now and where they are going.

Reality has been a bit at odds with appearances in 2006. All of the fanfare has been from Intel. Revision F from AMD was a minor announcement as was 4x4. In contrast, Intel started the ad campaign blaring back in Q2 long before Core 2 Duo was actually available. And, it hasn't stopped. We have seen review after review of Woodcrest and Conroe and Kentsfield and Clovertown. Each review has been so hopeful and practically giddy with all of the incredible speed of C2D over K8 as well as lower power draw. Add to that, all of Intel's production capacity and AMD's capacity limitations and many Intel proponents were ready for announcements that Intel had taken back significant share from AMD. Except, it didn't happen.

The fourth quarter of 2005 was the best quarter that Intel has ever had in terms of processor sales. Yet, this didn't stop AMD from taking 4% volume share from Intel. I was a bit cautious about this in the first quarter of 2006 because I thought the gain could have been temporary and the volume share could have switched back. However, AMD not only held onto its 4% but managed to add another 1.5% giving it a total gain of 5.5% by Q3. Intel has gained none of this back nor has Intel gained any microprocessor revenue share. I'm guessing that some are waiting for the Q4 reports to see if Intel has gained anything. However, with AMD's capacity constraints Intel could have temporary gains if the market volume surges more than AMD can match. This wouldn't be a real gain because the % share would fall back again in Q1 07 when the volume drops. The best time to see volume share will be the second quarter when volume is lowest. Sales at that point should reflect a true preference in hardware for the market unless the total revenue falls. With falling revenue, share increases by AMD may not be accurate which is why I wasn't sure about AMD's volume share increases until Q3 of 2006. However, if the market stays up then Q2 should be accurate.

That Intel has not gained share is simply not believable to some. They point out that C2D is better and therefore Intel should gain. The problem with this idea is several things. First of all, Intel started producing C2D in mid year and then has ramped to 25% of production by today. This puts C2D at only 6.25% of production in Q3 and 18.75% of production in Q4. So, C2D accounted for only 12.5% of Intel's production for 2006. This has simply not been enough to have much effect on share. AMD will leave 2006 with the best year it has ever had with twice the processor revenue that it had 2 years ago. In contrast, Intel will leave 2006 with about the same processor revenue as 2 years ago. I think anyone with common sense can see that AMD has done much better than Intel in 2006.

Seemingly to fix what some must perceive as a devine right by Intel to take back share, some have invented paper gains for Intel by including the X86 sales from VIA with the volume figures. With one of their processors being end of life, VIA dumped these on the market. If we include these processors in the numbers then this lowers Intel's Q2 share even further which then makes the Q3 numbers appear to be increasing because the VIA share is gone again. However, these are only paper gains and don't reflect any actual increase by Intel. If we look at the share between AMD and Intel only then Intel has lost more share since Q4 05 and there has been no gain for Intel in Q3. Those who stoically ignore such attempts or perhaps who find the small paper gains to be insufficient then turn to early 2007 with great hope for share gains by Intel. The basic argument is that Intel is still ahead with C2D and with its higher percentage of production they argue that Intel should be able to gain. However, AMD is not actually that far behind. The latest reviews that I've seen suggest that K8 is about 10% slower per clock than Intel. However, since K8's are priced lower per clock than Intel this makes the AMD processors about the same except for FX-62 which is more expensive.

That AMD's processors are priced about the same as Intel's for the same power has again caused a lot of consternation from Intel fans. Some have even insisted that AMD should price its X2's below the lowest priced C2D, the E4200 but this has not happened. I still see the arguments popping up, groundless though they may be. It seems that some just cannot understand that the fact that E6700 is faster than FX-62 doesn't mean that all C2D's are faster than all X2's. The AMD X2's priced similarly to E6300, E6400, and E6600 have similar peformance for most tasks. And, there is the neverending misuse of benchmarks to prop up smoke and mirrors arguments about C2D. For example, it is understandable that video conversion benchmarks keep all of the data in memory to test the processor. However, this does not mean that users will see the same speed when the data is pulled off the harddrive under actual use. This is true of common user applications which spend most of their time waiting on the user. There are similar problems with tests that don't use all of the cores, benchmarks that show big gains because of cache, and benchmarks that are based mostly on the graphics processor. For example, a benchmark might be very speedy due to cache when it is the only thing running but this doesn't reflect a real computing environment at all where that same process would have to make do which much less cache.

Perhaps because of the lack of gains by Intel there has been a flurry of negative rumors about AMD lately. This includes ideas that AMD is behind in 65nm, is having problems with 65nm, and won't deliver K8L on the desktop until Q4 07. AMD has said that 65nm production is at 25% at the end of 2006. It is impossible that AMD could be at this level without having shipped something like 8 million processors. Some of these would have to have been delivered early enough to be out before year's end yet rumors persist that AMD has delivered no 65nm chips. The second idea comes from the fact that the 65nm chips are not half the size of the 90nm chips. This has led to some rather wild speculation that AMD has added new undocumented sections to the die or that AMD is having problems with 65nm. Actually, neither of these are true. Although 65nm is capable of producing die features that are half the area of 90nm you can't simply shrink 90nm transistors like you would a photograph. If you just shrink the 90nm transistors then at some size they will stop working properly. The first production with 65nm is only a partial shrink because this is the first round of 65nm transistors. These will get tweaked better for the 65nm process in revision H (K8L) and will be able to be reduced more. The 65nm dies that AMD produces at the end of 2007 should be shrunk more than what is being produced now. Again, this is not unusual as AMD did the same thing with 90nm.

As to the idea that AMD won't deliver K8L on the desktop until Q4 07, AMD has contracts with one supercomputer that will be running by end of Q2 07 so K8L production has to start in Q2. Desktop versions of K8L will come out in Q3. Apparently, the fact that the intitial supply of K8L is tight because of preordering has led some to believe that production won't start until Q3. Then apparently the logical assumption is to push back the desktop production to Q4. People have likewise pushed Intel's production of 45nm up from Q4 to Q3. This would then have 45nm being released from Intel before AMD has any desktop K8L's. However, not even Intel is saying this. Real production of 45nm by Intel in Q3 07 is unlikely.

And, what would rumors be without speculation of a point to point bus for Intel? Supposedly, Intel will release a point to point bus (CSI) in Q3 07. Actually there is no indication of this at all. The earliest that it looks like Intel could release CSI is early 2009. It looks like people are getting CSI confused with Intel's quad FSB chipset which will finally allow Woodcrest to be 4-way. The confusion seems to come because Intel insists on calling this a high speed bus rather than a Front Side Bus. Other than the name change it looks and works exactly the same as the current Intel FSB's that connect the processors to the northbridge. A true use of CSI would require an onboard memory controller like AMD has plus a new socket since you cannot run a memory controller on the current socket 775/771. There are other cards to fall yet. For example, AMD is releasing a faster Athlon 64 which should match E6700. This could be offset by a faster 3.2Ghz Conroe but only if Intel slides its prices down one notch. I'm sure Intel will do this eventually but perhaps not in Q1 07. There have been rumors that Intel will have 3.5Ghz chips by end of 2007 but then again the rumors insisted vehemently that Intel was going to have a 3.2Ghz Conroe at launch and this hasn't happened yet.

So, 2007 becomes a race. Intel will ramp C2D up from 25% while AMD continues to ramp 65nm on FAB36. Then once the new bump and test facility is completed AMD will begin taking FAB 30 down for conversion to 45nm. The best situation for Intel would be that the market expands rapidly which would allow Intel to grow faster than AMD since AMD will be capacity limited through most of 2007. With normal expansion, Intel is likely to continue to slowly lose share to AMD. This may seem unfair however AMD has cultivated better relationships with customers than Intel has in the past. By the time Intel has demonstrated any change AMD will have K8L. Further, Intel's gains have mostly been on the desktop which is the least profitable area. AMD has gained in mobile which is more profitable, has produced fewer low end Semprons, and is still holding onto the top 4-way server market. Intel won't be able to move into 4-way until Q3 07 at the earliest when it finally has a chipset with 4 FSB's. Further gains by Intel on the desktop will most likely be offset by gains from AMD in both mobile and corporate areas. I would expect AMD to end 2007 with a gain of about 2.4% in volume share.

The problem for Intel today is that this isn't like 2002 when Intel was able to grab back large amounts of share. Intel now has to deal with an AMD that has a credible name in servers, a growing presence in corporate, total system solutions from the ATI purchase, a growing presence in mobile, and both reduced costs and increased capacity with a second 300mm FAB. The situation would be completely different today if AMD still had only FAB 30 and if this were the case all my money would on Intel. However, with FAB 36 coming up in capacity and AMD's uncanny ability to do rennovation without taking a FAB completely offlline I just can't see anyway for Intel to take advantage. If the market expands quickly then AMD would gain less volume share but revenue would be better for both AMD and Intel. I'm still expecting Intel to have to do more divestment and probably another reorganization in 2008. Overall, however, 2007 should see Intel's and AMD's product lines and graphics support move much closer. By end of 2007 Intel should have something to compete in 4-way but it will have increased competition in 2-way and the desktop. 2008 will then bring new mobile competition from AMD as well as increased server and graphic competition. Intel will have to be on its toes in 2008 to stay competitive and 45nm by itself won't be enough. Looking further ahead Intel proponents are quick to point to CSI but Intel will then be facing an AMD with two functional 300mm FABs, tightly integrated graphics, and a modular core for easier upgrades so 2009 will still be highly competitive. Worse still for Intel, with 30% of the cpu market for AMD, Intel's monopoly will be broken. So, appearances in 2007 should be better for AMD and Intel should be able to climb back up to the 2005 processor revenues but mainly the advances by both Intel and AMD will be good for consumers.

Sunday, December 24, 2006

Music -- The Collapse Of An Industry

I've seen several Time/Life commercials for music collections lately. The problem is that while these collections don't really solve a problem they do tend to point out just how awful the quality of music has become. Somehow, music producers have slowly disconnected from their own customers. Today, the quality of music is so bad that there is no strong incentive to buy it. However, at the same time the channels for delivering classic music are so poor that this is cost prohibitive. Today, there exists a huge demand for music that is not being met while music producers are either unaware or unable to meet the demand. According to the recording industry's own data, music sales are down 33% by volume.

I've recently seen commercials for Time/Life's 70's collection. This is 10 CD's with 150 songs for $150. The problem is that this pitiful collection doesn't even scratch the surface of 70's music. The minimum collection would be 200 songs from each year which would amount to 2,000 songs and presumably 134 CD's for $2,000. This is not an offer that is likely to appear from Time/Life. I doubt though that anyone at TL even realizes or cares how insulting this notion is; 150 songs just does not and cannot do justice to a decade of music. 200 per year would be a bare minimum. A more reasonable number would be 10 new songs per week and about 500 songs total per year. This would give us 5,000 songs total for the 70's and would take over 300 CD's. This just isn't practical. How many people are prepared to fork over $5,000 at $1 per song to have a genuine collection of 70's music? And, what about the 60's and the 80's? How many people have a spare $15,000 for music? And, my estimate of 10 songs per week is just a ballpark figure; we could still be scraping off some very good music with this number. Perhaps 10,000 would be better but this of course would just make the disparity even greater. And, TL is not unusual on its pricing. Assuming that a 10,000 song 70's collection would even be available at iTunes the price would basically be the same at 99 cents per song. It is clear that cost is a prohibitive problem with delivering classic music.

I can identify with music from the 40's, 50's, 60's, 70's, and 80's however, it appears that there is a definite deterioration starting in the 90's. This trend appears to have bottomed out and has now stayed at the same low level since 2000. To put it simply, the quality of music today is only a fraction of what it used to be. I wondered what could have happened to throw the music industry so badly off the track that it had followed for half a century. It appears that the problem is radio. Although music producers create and distribute the music it has been up to radio stations to make buyers aware of new music. This was never a problem in the past as the great number of independent radio stations were all too eager to cater to many different tastes in music. However, during the 90's these independent radio stations were bought up by media conglomerates and the process began to short-circuit. Rather than having independent programming, the play schedules became homogeneous across dozens of stations from city to city. As consolidation continued the number of choices became less and less. This had a chilling effect for music producers since there were fewer and fewer independent radio stations to promote new music. In the past, a good song would always be picked up and played by a disc jockey somewhere and there are many examples of hit songs that started from just one station. With independents gone it became important to music producers to have music that was acceptable and this has led to drastically reduced risk taking by producers both in terms of style and in terms of costs.

The rise of rap music was not so much due to embracing a new genre by music fans but rather a genre that has been pushed by producers due to cost considerations. With typical music production studio time is very expensive and requires long hours laying down multiple layers of instrument and vocal tracks and then many more hours mixing and adjusting the sound until it's right. However, rap and hip hop typically use pre-recorded music so this removes the studio time spent recording and mixing the instrument tracks. Rap and hip hop also typically do not have as many vocal layers. For example, a traditional song might require four music layers for percussion, rhythm, lead, and solo instruments using half a dozen musicians. If instruments like saxophone or trumpets are used then it will take more layers because these instruments tend to have different volume levels than other instruments. These layers can be much more elaborate as when The Eagles used symphony music for Wasted Time and Fleetwood Mac used a marching band for Tusk. The vocal tracks can also run to many layers since there will be verse, chorus, and backup vocals and sometimes multiple layers of the same singers for self harmonies as was common with The Carpenters, Air Supply, and Janet Jackson. One album can involve several song writers, many musicians and vocalists. In contrast, A rap album often involves pre-recorded music with one song writer and one vocalist. Even when these are stretched it doesn't usually involve more than a drum or rhythm loop and one or two other vocalists. With much less effort involved, the cost of producing a rap or hip hop album is only a fraction of the cost of a regular album. This has made rap and hip hop much more attractive to music producers since the up front costs and therefore the risks are much less.

It isn't difficult to tell that radio stations in general have declined. When I was in high school there were two local radio stations that played popular music. These are both gone. Popular music was also available on AM however the AM band has almost entirely been replaced by talk radio. Judging from what I have heard on country music stations it is possible that country music has fared better. It is clear, however, that both variety and quality of popular has drastically declined. I am just not seeing bands today of the caliber of The Eagles, Fleetwood Mac, Journey, ELO, Foreigner, Chicago, Steely Dan, Moody Blues, Temptations, The Doors, Spinners, Beetles, BeeGees, Air Supply, Reo Speed Wagon, Styx, Duran Duran, Jefferson Airplane, Herman's Hermits, Queen, Hall and Oates, Heart, England Dan and John Ford Coley, Credence Clearwater Revival, Crosby Stills and Nash, Police, etc. This list is just a tiny sampling of very good groups and their replacements are nowhere to be seen.

The need to contain costs has led to fewer bands in favor of solo artists as well as the rise of rap and hip hop. Likewise the strong need to reduce risks has greatly curtailed variety in music that is produced today. This drastic reduction in both quality and variety has caused a sharp drop in demand for music which has in turn created a downward spiral for music producers. With less demand, there is less chance of having an investment payoff and this in turn leads to less risk taking which leads to less variety and quality and ultimately even less demand. The demand is actually there and as strong as it has ever been; it's just that the demand is not for what is being offered. The present situation is incredibly strange as there are both a vast number of talented songwriters, musicians, and singers who want to fill the demand along a huge pool of consumers who badly want good music. Supply and demand have become so out of balance that it is a bit like New Orlean's being below sea level. The only thing currently holding back supply from demand is the unnatural damning effect of the radio conglomerates and the ever more conservative music producers.

The traditional mechanisms of radio involves commercials and advertising support. However, with less variety and quality there is less reason to listen to a given radio station. Consider that while the radio conglomerates are trying to scrape by with less variety I can listen to 70's music with no commercials on my cable all day long for only about $10 per month extra. This is drastically less than it would cost to purchase the music outright from iTunes or to buy a TL collection. The music industry seems to be stuck with the idea of total ownership rather than temporary use of a song. When I listen to music on cable it's only temporary; I don't keep or own the music. I'm not sure if it is the idea of piracy that prevents the music industry from a more reasonable temporary pricing rather than outright pricing. With 1,000 songs per year and 4 MegaBytes per song this would require about 120 GigaBytes of storage to have a good collection of 60's, 70's, and 80's music. This is certainly within the range of common harddrives today so storage would not be a limiting factor. However, organization would be. Having the artist, song title, albumn title, and year of release for 30,000 songs would be no minor task. Without some type of database to keep track of all this information it could be nearly impossible to find the songs that you want to listen to even with your harddrive stuffed full of mp3's.

However, if the music industry were actually doing its job then this wouldn't be a problem. The music industry could easily maintain records of music titles, artists and groups, year of release, along with much more more information such as lyrics, band members, songwriters, covers, etc. It should be possible to find a band by knowing the name of one band member or to find a song by knowing some of the lyrics and it should be quite easy for individual playlists to be compiled for each listener. Perhaps this will happen at some point. Perhaps we will have distribution via some type of WiFi, and music will bypass broadcast radio altogether. This could allow more tailored advertising and sampling of new music based on your established tastes. I'm thinking that something like this will have to happen because I cannot see this vast gulf between talent and demand continuing forever nor can I imagine that music producers will be dumb enough to leave themselves cut off from their source of income indefinitely. However, until something like this happens presumably music production will stay at the low level of quality and variety that it is today and radio conglomerates will continue to choke off supply.

Friday, December 15, 2006

Intel Versus AMD: The Truth Unfolds

It has not been easy to find out the real story of how Intel hardware compares with AMD hardware. The reviews from places like Anandtech and Toms Hardware Guide have been so sloppy and unprofessional that no useful information could be obtained. However, after a second review at Tech Report there is finally enough accumulated data to draw some conclusions.

Often when I mention the horrible state of hardware testing today I get some flack from Intel fans who really want to believe that any published test results that show Intel favorably must be true. I suppose there have been a number of people who have suggested that I have been somehow denying reality by not embracing these results. Of course, these people don't understand at all how I think. Poor testing doesn't mean that AMD is better; it just means that you don't know. With proper testing, the results could show that Intel is even better than what was shown with poor testing. I suppose since I'm now talking about testing done at Tech Report some must be wondering if I am endorsing Tech Report as a good fact source. Well, not exactly. The problem is that it has taken two reviews (and sometimes a third) to get the facts at Tech Report. If the testing had been truly prossional then we would have been able to get what we needed from the just one review. But, this is not the case; it is necessary to look at two or more reviews to find out how reliable the tests themselves are. What this means is that some of the data published by Tech Report does not fully show what is happening with the hardware and therefore this data can be misleading (and the author's comments can be incorrect as well). However, by using more than one set of tests there is finally enough information to draw some conclusions. I suppose this is at least better than most other review sites where the testing still shows essentially nothing even with two reviews in hand.

One of the issues that keeps getting tossed out is the idea that Intel processors now draw a lot less power than AMD's. This seems to be due in part to a desire to throw off the very bad reputation that the Prescott cored processors had. Yet, there is no indication of any big advantage for Intel. The highest clocked chips from both companies are rated at 120 watts and the second level from both companies runs about 80 watts. You have to add a bit to the Intel numbers because their TDP isn't a maximum like AMD's and you also have to add the power draw for the Northbridge which is included with the AMD numbers. However, Intel's C2D processors have much better power management than AMD's current Revision F and 65nm Revision G processors so this tends to even out. The sole advantage that Intel currently has for any class is for their quad cored processors and this is only because AMD doesn't have a quad core out yet. You could however argue that if you rate processors by SSE performance per watt then Intel is better. This is true if you use SSE most of the time such as for heavy duty rendering or scientific or engineering calculations. But, for most areas Intel and AMD are about equal. This shouldn't change until late 2007 when Intel releases 45nm chips.

The first benchmark is Cinebench which renders a graphic scene. Surprisingly, Intel and AMD are almost dead even on this benchmark. This is not due to AMD's greater memory bandwidth because this test is not memory intensive. I would have expected Intel to be faster but this is not the case. At the same clock speed the two are tied. This benchmark also does not scale very well; perhaps the code will be better by the time AMD has its own quads out.

The next is Pov-Ray and once again the results are very close; Intel trails by about 4% at the same clock. Either Pov-Ray does not make use of SSE or AMD is gaining more from the 64 bit code. This application is not memory intensive but it does show good scaling even with 8 threads. A dual socket Clovertown Xeon 5355 system should deliver about the same performance as a quad Opteron 8218 system and a single socket Kentsfield QX6700 should be about the same as a dual socket Opteron 2218 system.

With 3DS Max scanline rendering there are two factors. First of all, for a comparable system, Intel is 25% faster at the same clock than AMD. This is probably due to better SSE. Secondly, this code does not scale very well. Intel shows a 22% drop-off when scaling from 2 threads to 4 while AMD shows a 29% drop-off. This looks suspiciously like poor NUMA support. Finally, in contrast to the scanline rendering, 3DS Max's ray tracing code is so poor for multi-threading that it isn't useful at all for comparison beyond 1 core.

In the Quad FX review the Valve Source engine particle simulation numbers are all over the place. I've tried to see if anything can be gleaned from this information but unfortunately there are no matching numbers in the Clovertown review. This is a good example of a benchmark that less knowledgable fans might point to as an Intel win but these numbers are far too erratic to tell anything. The Valve VRAD map build however shows Intel 26% faster at the same clock. There really isn't anyway to tell if this is due to cache, integer IPC, or SSE but Intel is clearly faster. This will be a good benchmark to repeat with K8L. Since K8L should increase cache, integer IPC, and SSE the results should be much closer.

3DMark is not in the Clovertown review but after comparing with an older review with C2D E6300 it is clear that 3DMark 06 CPU Test 1 is good and not simply gaining from larger cache; Intel is about 10% faster.

The MyriMatch test is interesting. It is clear that this code is terrible with multi-threading and quickly loses efficiency as threads increase. However, the numbers drop off not only with more threads but with faster clock speeds as well. Worse still, the Intel numbers show variances of 5% when increasing clock by 15% and the AMD variances are even greater at about 8%. This leads to a very unreliable spread showing Intel is somewhere between 3% and 27% faster. Since I did not see this variance in the other tests and there would be no reason for Tech Reports to have reconfigured the systems during this test I would have to say that the code is at fault and the test is therefore useless.

The Euler 3D computational fluid dynamics test is a good example of how misleading the data can be and how equally far off the author's interpretation can be. He claims that the code is both floating point and memory intensive. Yet, when comparing the two sets, there is no evidence of any drop-off due to memory. With double the memory bandwidth, the dual socket woodcrest system is actually slower because of the higher latency FBDIMM's. There is no gain at all from the higher memory bandwidth, therefore the code is not memory intensive in the sense of saturating the memory bandwidth. Intel seems to be about 18% faster. However, some of the scores are far worse than 18% and this again brings up suspicions of NUMA problems. Looking more closely, we see that in spite of claims that the Quad FX tests were done using a NUMA compatible OS, there is clear proof of the opposite. Quad FX and the dual socket Opteron 2218 system are very similar as both are dual core on dual socket. And, their scores are almost identical even though the FX is clocked 15% faster and uses faster memory. Apparently, the interleaving that was used with the Opteron is making up for the faster speed of FX, but this could only happen if the FX were running without NUMA support. This means that for any code in the FX review that uses large working sets the FX processor will show an anomalous dropoff. This is why one review was not enough; you can't see this without comparing with the second review. So, Intel is 18% faster rather than the 73% as would be suggested by the FX numbers. Even with the interleaving hack this very poor number would have been cut in half and then half again with proper NUMA support.

The Folding @ Home series is interesting. But, there are errors in the totals for both reviews. The actual totals are pretty close and would give Intel about 6% more speed. However, what we really want is the best rather than totals or averages and this would give Intel about 25% more speed. However, it is stated that the same code for AMD uses 3DNow! rather than SSE so the actual difference could be less. However, I think 25% due to better SSE is reasonable. This is a benchmark to watch because it should have an increase with K8L unless the code is not actually making use of the AMD hardware.

The Sandra benchmarks are both good and bad. The Multimedia Integer tests are way off. I'm not sure what they are testing but whatever it is does not show anything real about the processors. If these scores were taken at face value Intel would be 253% faster in integer. Or to put this a different way 1 C2D core would be 89% as fast as 4 AMD cores. This is yet another published score that unknowledgable fans might tend to mention as a sign of the phenomenal speed of C2D. However, this is obviously impossible theoretically, architecturally, and from the fact that no other test shows speed like this. Therefore, we have to ignore this test. However, the Multimedia Floating Point test looks good. Intel is 79% faster. This is reasonable since Intel can easily do 100% faster with SSE and could theoretically, with perfectly matched data, actually hit 4X AMD's speed. However, this is not a likely thing to occur. This is another benchmark that should become about equal with K8L. Perhaps by the time AMD releases K8L we will know what is wrong with the Integer test.

The Windows Media Encoder shows a significant drop with 4 threads, but it drops about the same for Intel and AMD. With the original code Intel had a 23% lead, however with the newer 64 bit code this lead drops to only 15%. This is true for both 2 and 4 threads.

PicColor contains some anomalous scores which lessons confidence in the set's overall accuracy. The extremely low cpu usage graphs add to the uncertainty. The best I can say is that for most tasks Intel seems to be about 12% faster but is about 60% faster on floating point.

Panorama Factory is not memory intensive. It shows poor scaling with 4 threads and truly horrible scaling with 8 threads. However, the scores appear consistent. Intel is 7% faster. The only odd score is the FX-74 score which is slower (12% instead of 7%). This seems to be due to NUMA problems for the large datasets. Apparently, interleaving is enough for this task but FX-74 without even that shows a drop-off.

Tech Report has used three different methods of power consumption testing with the three reviews I referenced. This somewhat diminishes the value of the power consumption tests. For example, the Quad FX review does show some advantage for Intel, however the load application is Cinebench which has poor scaling. In the Clovertown review the load application is Pov-Ray which scales well and the power consumption is very similar. Realistically, Intel only seems to gain with lower power draw with its Kentsfield QX6700 processor. There is no real difference with dual core/single socket between Intel and AMD nor with dual socket.

I generally give Intel a 15% integer lead so I'm surprised that Intel doesn't seem to show this kind of lead for a lot of the tests. For example, I usually match X2 4200+ with E6300, 4600+ with E6400, and 5000+ with E6600. Yet, it seems for many tasks, Intel only appears to be 10% faster. This would mean that 3800+ would match with E6300, 4200+ with E6400, and 4600+ with E6600. This would make 5000+ equal to E6700 but AMD would still have no procesor to match X6800. This seems to be about right if we exclude SSE. However, if SSE is needed then Intel is the current bargain.

Upgraded To Beta Version Of Blogger

I recently discovered that my Blogger ID had stopped working and I was unable to log into other blogs. My blog ID still worked on my blog but not others. I then discovered that I could log into other blogs with my Google ID so this gave me a good idea what the problem was. Apparently at some point all of the old blogs will be changed to the newer Beta version. The Beta version uses a Google ID rather than a Blogger ID. I already had a Google ID since I had to create one for AdSense but I had never actually upgraded my blog. The upgrade messages showed up everytime I first logged in.

When my Blogger ID stopped working it became clear to me that Google has begun changing the login format and that this was why my old Blogger ID was not recognized on other Blogs. I have no way of knowing if this effects all Blogger ID's or just people who have blogs of their own. For me, it was necessary to upgrade my blog to the Beta version to straighten out my login ID. It seems to work fine now just with the Google ID instead of the original Blogger ID. I have to say though that the upgrade process is confusing because you are faced with a screen that asks if you have a Google account already. The choices are Yes and No. The problem is that there is no button on the Yes side so you can only click No. I didn't really want to click No since I already had a Google account but I had no other option. If you click the No button it will take you to another screen where you can then either create a Google account or login to your existing account. So, the option of using your existing Google account is there on the second screen but Google could have made this so much clearer.

Now I am wondering with my blog upgraded to Beta whether other people might be having trouble logging in. My suggestion would be that if you don't have a blog and your Blogger login doesn't work that you try creating a Google account. If you do have a blog then you might have to upgrade to Beta like I did. You can get some information about this from Blogger Help. Thank you.

BTW, I need to leave this article up for a little while to let people know what is going on. However, I'll mention that I'm working on my next article which will probably be called,

Intel Versus AMD: The Truth Unfolds


Tuesday, December 12, 2006

Walking Into A Mirror

The most significant development this year in the competition between Intel and AMD seems to be that the days of moving in different directions are over. K6 was not so different from PIII. However, when AMD moved to K7 and Intel moved to P4, the architectures diverged dramatically. As AMD continued with K8 and Intel moved to Prescott, the architectures became even more different. By 2005, in terms of both architecture and corporate structure, there was little overlap between Intel and AMD. This year, with the introduction of Core 2 Duo Intel has pulled its architecture back in the direction of K8. Likewise, AMD is moving in Intel's direction. What we will see through 2007 and 2008 will be the convergence of the two companies both architecturally and structurally.

In 2005, AMD and Intel were as different as they had ever been since AMD started making X86 processors. AMD had only a single 200mm FAB compared to Intel's many 300mm FABs. And, having divested of Spansion, AMD was strictly processors with a few server chipsets in contrast to Intel's diverse interests including its large chipset and embedded graphics business. In terms of cpu architecture, Intel had a long pipeline, virtual HyperThreading, high clock with low IPC design. AMD's short pipeline, dual core, low clock with high IPC design was almost completely the opposite. Intel's MCM Smithfield procesors were a small step in AMD's direction. However, in 2006 with C2D Intel moved to a short pipeline, high IPC, true dual core design and dropped HyperThreading. The architectures are still different but not nearly as different as they were last year and they are still converging.

Just as Intel moved closer to AMD by shortening the pipeline and increasing IPC while extending the architecture to 64 bits so too AMD nows moves in Intel's direction. Core 2 Duo has a dedicated stack unit and AMD moves closer to this with its sideband stack optimizer. AMD improves instruction reordering and out of order loads moving it closer to Intel. AMD now has data dependent latency on the divide instruction as Intel had already done. AMD stretches SSE width to a full 128 bits doubling the speed of SSE operations. It doubles the bandwidth of Prefetch and the L1 bus. Again, these are changes that Intel had made from Yonah (Core Duo) to C2D. AMD might have a small advantage here due to twin L1 buses rather than just a wider L1 bus.

Intel's architecture has been better with DDR2 because of the larger cache. AMD is now moving to a split memory controller where each half can act independently which is what Intel has now with two memory channels. AMD also increases cache size by adding shared L3.This along with improved memory scheduling, a better write burst mode, and out of order loads more than makes up for the higher latency of DDR2. We should see a big improvement for AMD with DDR2 and into DDR3. This again, moves AMD up to where Intel is now.

AMD also moves in Intel's direction by adding some inclusive functionality to its cache while also adding shared cache as Intel has now with C2D. AMD is expanding the number of FastPath instructions. This is important because the decoders can do 3 FastPath instructions or 1 complex instruction per cycle. The more instructions that are fastpath the better. This again makes up for some of the improvement that Intel gained by adding a fourth decoder and macro-ops fusion.

Overall, AMD moves much closer to Intel's C2D with the changes in K8L. AMD will add to its already greater memory access speed and match or beat C2D in terms of SSE. However, the changes don't quite add up to C2D's 4 instruction issue and Macro-ops fusion. I would guess that AMD will remove about 3/4 of the current IPC gap. This would mean that a K8L of 3.1 Ghz would match a C2D of 3.0 Ghz. This is much better than today where it would take a 3.5 Ghz K8 to match the same 3.0 Ghz C2D.

Both AMD and Intel use independent L1. AMD's independent L2 plus shared L3 should be pretty close to Intel's large shared L2. The main differences today are that Intel's C2D still does not allow I/O access above 32 bits and I'm not certain that C2D supports addressing beyond 36 bits. AMD has the advantage with an onboard memory controller and point to point interface. It looks though like Intel will defintely move in this direction with its own onboard memory controller and CSI point to point interface on a new socket in early 2009. AMD has also given indications that it is trying to shorten Intel's smaller process lead.

Structurally, AMD has taken big steps in Intel's direction by creating a 300mm FAB and purchasing ATI. ATI gives AMD a directly competitive position with Intel in terms of chipsets and embedded graphics. AMD will now be able to satisfy the needs of customers who want a complete solution from one manufacture as Intel has provided for some time. AMD will now compete with Intel directly in both embedded graphics for notebooks and embedded graphics for corporate customers. At the same time, Intel has begun divesting of underperforming sections of the company and trimming down toward the main cpu business closer to where AMD already is. AMD's single 300mm FAB greatly boosts its production capacity while reducing cost. Upgrading FAB 30 to 300mm will continue to move AMD in Intel's direction.

There are probably AMD fans who are hoping that K8L will allow AMD to leap ahead of Intel's C2D in 2007. Similarly, I imagine there are Intel fans who are hoping that Intel's move to 45nm will allow Intel to stay ahead of AMD. However, neither of these scenarios seems likely. K8L should be pretty even with C2D architecturally rather than a leap ahead. For process technology the rumors abound with stories of 4.0Ghz clock speeds for Intel while decreasing power draw. These same rumors often limit AMD to as little as 2.9 Ghz putting AMD one full Ghz behind Intel. This would put Intel significantly ahead of AMD if true but it doesn't seem likely. AMD shares process technology with IBM. It is certainly in IBM's interest to be competitive in terms of process. So, it seems likely that if something were lacking that would allow Intel to gain significant advantage IBM would find another company with additional process technology that could be licensed. I'm reminded of the many rumors that Intel would have 3.2Ghz C2D chips at launch but these are still unreleased. I'm also reminded that after Revision F of K8 was released there were claims that it was actually slower than Revision E. It seems that optimism tends to follow Intel while pessimism follows AMD regardless of what each company actually does.

I expect AMD to continue to slowly gain share at the rate of about 0.66% per quarter. I expect AMD and Intel to be roughly equal on the desktop in Q3 07. Likely Intel will have to address AMD's new dual socket FX once AMD has quad core chips for these. If Intel did not address this area they would have nothing competitive. It also looks like Intel will finally have a 4-way server C2D offering in the same timeframe. However, just as AMD's quad FX won't reach its full potential until AMD has quad core FX's, Intel's 4-way server chipset won't really pull Intel even with AMD. Clearly, this will be a stopgap until Intel can release a new socket with integrated memory controller in 2009. However, Intel has no choice but to offer a stopgap chipset since the P4 Xeon will be completely outclassed by K8L. Intel's processor will be fine; it will be the chipset that is stopgap. Intel's quad FSB northbridge will be slower and more expensive than the equivalent Opteron 4-way but it should be close enough to stop Intel's 4-way server share loss. Intel will probably get a nice boost with 45nm technology that will give it an edge on the desktop late in 2007 but AMD will follow with its own 45nm technology by mid 2008. However, any advantage that Intel might have will tend to be countered by AMD's increased competition with embedded graphics. But this won't be the only change. Increased revenue gives AMD more money for R&D and AMD's advantage with APM will come into its own once AMD has two 300mm FABs. My guess is that Intel will also be taking steps to try to match APM and will probably have to do a second reorganization in 2008. AMD for its part may begin construction of a third FAB, possibly after mid 2007.

We know that Intel will move to an Integrated Memory Controller moving it towards AMD. It would seem reasonable that AMD must be looking into Intel's 4 instruction issue and macro-ops fusion to gain future speed. We also know that Intel will eventually use SOI as AMD has been doing for years now. By 2009 AMD and Intel should look much more similar than they did in 2005. I imagine the two will continue to converge as well go into 2010. For example, Intel is moving to a 2 year core design cycle while AMD is moving to a modular core. Intel's approach is less efficient than AMD's however Intel has more engineers to throw at the problem so I would imagine the results would roughly match. If 4 instruction issue really is a good idea then I would expect AMD to add this perhaps in late 2009. There will be a slight difference in process with Intel using high K dielectrics. I don't see any problem with this. Intel only needs to find a high K material with a suitable bandgap for this to work. The only area that I'm not so sure about is Intel's tri-Gate design. From what each company has said it looks like the tri-Gate will not be able to be shrunk while AMD's finFet will be. Still, one would assume that if the tri-Gate can't be shrunk that Intel would follow AMD and use a 3D dual gate like AMD's finFet. If AMD does build a third FAB the X86 processor market should turn into a true duopoly with much more stable prices and production. The big question is whether the market will reach duopoly status with just two 300mm FABs at AMD. However, it seems a certainty that into the foreseeable future AMD and Intel will continue to converge.

Sunday, December 10, 2006

Misinformation Rolls Onward

I had hoped that hardware review sites like Toms Hardware Guide and Anandtech would somehow rediscover the integrity they used to have. I've hoped that financial analysts would stop measuring Intel with a shorter yardstick than they use for AMD. However, even a brief look at recent articles shows that bias towards Intel is very much alive and well.

In this THG Clovertown article we see several problems right away. For example the only two compilers used are: Intel C++ Compiler Version 9.1.030 and Intel Fortran Compiler Version 9.1.029. This guarantees that Intel will have an advantage because the Intel compiler purposefully skips optimizations on non-Intel processors. Secondly, we see that the bulk of the "tests" are either single or dual thread. I'm still baffled why anyone with common sense would test a quad core processor with single threaded code. This is a bit like testing a 500mph test vehicle in rush hour traffic in L.A. rather than someplace more suitable like the Bonneville Salt Flats. I suppose you could make the same lame argument that L.A. traffic is more like real driving conditions but a test is useless if it is artificially limited as so many of the recent tests have been. We also see that in the supposed "load" test that the testers fail to actually achieve any load on the processor. Intel gives the TDP of the 5355 as 120W while the 5160 is only 80W. Yet in the THG chart on page 11 the 5355 actually draws less power. I had strong hopes that THG might get back on track during 2007 but this level of incompetence or outright bias is hard to break. THG remains useless for real testing and benchmarking.

Another interesting article was this Economist piece. The theme of the author is clear as the article is entitled The Empire Strikes Back. Backing this up is a supposed graph showing that Intel's market share is on the rise and growing faster than AMD's. The only problem is that this graph is bogus. To get this imaginary increase they include numbers from VIA whose cpu's sell at a price below both Sempron and Celeron and therefore have no effect on Intel and AMD processor sales. The numbers for VIA were temporary inflated because VIA was dumping large numbers of processors that were End Of Life. By adding these anomalous VIA numbers in they make Intel's Q2 share look worse and give the impression of a changing trend. In reality, Intel's share has been slowly dropping while AMD's has been slowly rising. The change is roughly 0.66% per quarter. This trend should continue and if it does AMD will indeed arrive at 30% volume share by the end of 2008. I guess the problem is that if Intel has been slowly losing share for the last six months it would be impossible to use those snappy catch phrases in the article like, "right-hand turn", "turning the wheel", "successfully navigated the transition", and "Intel cemented its comeback". I guess the true phrases like, "Intel continues slow loss of share" or "Intel's reorganization was not deep enough" just wouldn't generate the same kind of excitement. In reality there has been no big turnaround in share for Intel in spite of the introduction of Core 2 Duo. Today, Intel continues to slowly lose share to AMD. Perhaps it is time to give up on the financial analysts as well.

Over at Overclockers Ed is claiming that AMD will only hit 2.9 GHz with dual core on 65nm. I'm not really sure where Ed got this information from. Common sense would suggest that if AMD can hit 3.0Ghz with FX-70 on 90nm then they should be able to do at least a little better with 65nm. If Ed had speculated 3.2Ghz I think that would be reasonable. Even 3.1Ghz would be a bump over 90nm speeds. However, I think speculating a speed that is lower than the speed for 90nm is just absurd. Yet in the same article he speculates that Intel will hit 4.0 Ghz with dual core on 45nm. Considering that Intel has not yet shown or announced anything faster than 3.0Ghz I would have to say that this is optimistic. The question is why the optimism always seems to be in Intel's favor. Overlockers is another website that is unreliable for a balanced look at Intel and AMD.

A website that is usually much better, Ars Technica, however showed some serious errors in their Barcelona article. This is the faulty paragraph:

It does not seem that K8L will catch up to Conroe in terms of the theoretical peak number of 128-bit SSE operations per cycle, however. K8L's two floating-point/SSE pipes give it two 128-bit SSE ops/cycle, and its FSTORE pipe can do another 128-bit SSE move per cycle, for a total of three per cycle peak. This is half of Conroe's peak theoretical throughput of six 128-bit SSE ops/cycle.

Conroe cannot do 6 SSE ops per cycle. It is true that sometimes Conroe can do a simultaneous SSE multiply/add in a single cycle however 6 ops is pure fantasy. Where the 6 ops number comes from would be two simultaneous multiply/adds plus one load plus one store. However, the actual datapath to L1 cache can only handle two 128 bit words at a time. So, a more realistic number is two 128 bit SSE operations per cycle which interestingly is what K8L will be able to do. It is true that sometimes Conroe could go faster by executing combined multiply/add instructions but the article fails to count the L1 datapath advantage that AMD has over Conroe. My best guess is that AMD will actually come out slightly ahead of Conroe on SSE.

I think that there are many who are still hoping for Intel to pull decisively into the lead again as they did in 2002. However, this is not happening and won't happen. The true situation is that AMD and Intel are becoming more and more alike both in terms of corporate structure and in terms of processor design. I'll talk more about this in my next article, Walking Into A Mirror

Tuesday, November 28, 2006

Roads Not Taken

Lately Apple and Intel both seem to be doing fairly well. However both of these companies have overlooked potential opportunities. Choices like these will eventually make the difference between success and failure.

Apple has been quite prominent on tv lately with their coffee house neo hippie Mac against the dull and untalented PC. It's cute I suppose but it certainly doesn't show Apple's reality. Apple has been boosted tremendously by both its iPod and iTunes website. Apple managed to get these into the market when no one else was doing it and has been successful. Unfortunately, both of these are doomed to follow in the footsteps of Sony's Walkman and become commodity consumer items. To put it simply, neither iPod nor iTunes can stand up to real competition. It is extremely unlikely that Apple will be able to come up with another consumer success like the iPod. One wonders how Apple will fair when its computers have to stand on their own against increasing competition.

Apple's big problem is that it is heavy in desktop systems but light in servers. Apple's natural ally would have been Sun. Sun is very heavy in servers but much lighter in desktop systems. Sun/Mac would have been a perfect match with Apple providing the experience and hardware for desktop/client and Sun providing the muscle and support for workstation/server. With MacOS now based on unix this could have worked well with a merger of sorts between MacOs and Solaris. This would have been an ideal situation for Apple where its Macs fitted seamlessly into heavy duty Sun backend server environments.

In terms of software, a Sun alliance would be even more profound. In spite of the hokey antics on Apple's commercial, the PC is not the Mac's true competitor. Apple's true competitor is a company that Apple has no chance of beating. This company is Microsoft. Microsoft is all too aware that Macs don't run Windows. However, Apple is all too aware that Macs are tied to Microsoft applications. This is why Apple does not and will not sell a version of MacOs for PC's. The retaliation from Microsoft would be epic and would probably include suspension of any further upgrades or releases for Mac versions of Microsoft Office. This is not something that Apple can afford.

However, an alliance with Sun would include Sun's Star Office suite as well as a major contributer to Open Office. With much less pain, Apple could have removed itself completely from Microsoft's control and opened up a true market for its products including MacOS for PC. That this did not happen could be due to a lack of vision among Apple executives or perhaps Apple just didn't like sharing the spotlight with Sun. Of course it could be that Sun was not open to such an alliance. Whatever the reason, this alliance was pretty much Apple's only ticket into the future. Alliances with HP, Dell, and Gateway are out of the question as they are direct competitors. Apple's deal with Intel now makes a Sun alliance nearly impossible along with any deal with Cray. And, Apple has already dropped IBM. The only name left that I can see is SGI. This wouldn't be as good as a Sun deal but with a bit more effort I could see it working. I have serious doubts though that the upper management at Apple can see this. But, without it, I would say that Apple's days are numbered as a desktop player. The desktop will continue to become more competitive as will mobile. Without a heavy share in servers Apple will eventually become marginalized. If this idea comes as a shock to anyone who really likes Macs then just consider the same goofy commercial if support were discussed.

Hello. I'm a PC and I'm supported by nearly all of the top electronics manufacturers and system builders.

I'm a Mac and I'm supported by, well . . . uh, just Apple.

Intel had a similar blunder with Transmeta. In fact, it is staggering to think that out of all of the losing businesses that Intel picked up like lint on a sticky lollipop they failed to see the perfect match. The Transmeta Crusoe was designed as a VLIW processor. It is true that this technology has been slow but this is primarily because the software layer translates X86 instructions into very disimilar VLIW instructions. However, this would not have been the case with Itanium. Crusoe was very much like a stripped down version of Itanium and and could have executed most of the Itanium instructions with microcode and only used the software layer for more complex translations. In 2000 the Transmeta company could have been purchased by Intel for what would have amounted to spare change. This would have given Intel an inexpensive, low power processor that was completely compatible with Itanium.

Intel could have used this technology immediately for embedded processors, palmtops, and thin and light notebooks. With a bit of effort I'm certain Intel could have beefed up the Crusoe and built a very nice second generation chip that would have been suitable as a general mobile processor. This could have allowed Intel to move to dual core earlier for more power. The design would have been good because it would have been able to run X86 better than the primative translator on Itanium but would have run much faster with native Itanium code. This technology would have meshed very well with Microsoft's .NET environment for even better performance. Proof that this could have been done is evident from the fact that AMD did this very thing when it bought Geode in 2003.

This foothold at the bottom of the market would have made it much easier for Itanium to hold its ground. It is even possible that by using the Transmeta technology in Itanium that Itanium could have run faster with X86 code. By almost any standard this would have been an inexpensive purchase that could have yielded substantial benefits for Intel. Or, in other words, it was a good risk. I still have no idea why Intel didn't take advantage of this opportunity. The almost certain result will be that Itanium will continue to be pushed out of markets by Opteron and by newer C2D based Xeons and will be pushed out of the market altogether in the next few years.

Wednesday, November 22, 2006

Supercomputing -- Catching The Last Wave

I had been waiting for the 11/06 Top 500 figures for Supercomputers. I had been expecting AMD to do well and this is what the figures show. However, the figures also show a worse situation for both Intel and IBM than I had expected. Since 2003 we've seen cycles of replacement in HPC but I think X86-64 will be the final cycle. And, the clear leader of that cycle is AMD.

We can see that traditional supercomputing architectures from Cray, NEC, Hitachi, and Fujitsu have been on a slow but steady decline since 2003 as shown with the dashed line marked "Super". We can also see that the once dominant RISC systems of Alpha, Pa-RISC, MIPS, and SPARC have plummeted during the same time frame as shown with the brown line marked "RISC Other". This is to distinguish the other RISC's from IBM's Power series. We can see the rise and fall of Itanium. Power seems to be a shallower mirror image of Itanium with a smaller dip and then a rise. However, the real story is the trend for Intel X86.

It is clear that the Intel 32 bit systems of the old workhorse P4 Xeon swept in to replace the vanishing RISC architectures. It is common sense that when Intel 32 began to fall in 06/05 that Intel 64 would rise to replace it. And, by the graph it is clear that Intel 64 systems shot up at an incredible rate. However, 11/05 doesn't follow common sense at all. Intel 32 systems should still be falling and Intel 64 should be rising, but we don't see that. It can't be a general trend because we see that AMD 64 is moving up nicely. What appears to have happened is that having sampled the Intel 64 systems in 06/05 the market somewhat recoiled and fell back on the older Intel 32 bit systems. Again, it appears that the market sampled Intel 64 in 06/06 but once again found it lacking in some fashion and this shows as a decline in 11/06. The most likely culprit is the high power draw of the Prescott based Intel 64 systems.

With AMD the picture is quite different. In 06/04 the older RISC based systems were falling rapidly. This share was picked up mostly by Intel 32 and AMD 64 with Itanium taking share from traditional supercomputing systems and IBM's Power. Six months later, AMD is flat while Intel 32 continues to absorb share from the still falling RISC systems and Itanium continues to take Power share. Six months later in 06/05 AMD is still flat as Intel 64 takes off like a bullet taking share from the falling Intel 32 and RISC systems. Power appears to have reversed the trend and is taking back share from Itanium. Just six months later this all changes. In 11/05 Intel 64 has lost momentum and Itanium plummets even as RISC and traditional SC systems continue to decline.

Clearly when we look at the last 18 months of supercomputing AMD 64 stands out as the leader of the pack. Intel 32 has peaked and is falling; there are no indications of a revival from traditional SC, RISC, or Itanium. This only leaves Power, Intel 64, and AMD 64 to take up the slack from the fading Intel 32 systems. For the past 18 months AMD has risen steadily. Intel had appeared to be a contender but the fall in the last six months along with the earlier slowdown casts serious doubt on this. AMD's position is also bolstered looking forward by three announced large scale HPC wins while there have been no similar wins for Intel. With AMD's dominance in 4-way systems and its one year lead with Torrenza over Intel's Geneseo initiative it doesn't appear that this trend will change anytime soon. Intel won't have a real quad system for its C2D architecture until it releases a new chipset in late 2007. However, this chipset won't be suitable for HPC. This will put Intel at a disadvantage until perhaps mid 2008 to early 2009. However, AMD could be the dominant player in HPC long before then. AMD could top 40% by 2008 duplicating Intel's once strong position with Intel 32.

The cycle of waves is even easier to see if we look at the graphs for total power and total processors.

With the % of Total HPC power we can see that the first wave to replace the older RISC systems was Intel 32. The second wave to replace Intel 32 appeared at first to be both IBM's Power and Intel's Itanium however now it is clear that Itanium peaked in 11/04 and the second wave was Power alone. Now too it is clear that Power peaked in 11/05 after never having reached quite the performance dominance of Intel 32 and has been declining for the past year. There doesn't seem to be much hope for a resurgence of Power based HPC since IBM has been using lightweight embedded derivatives of Power for Blue Gene which are not as good for general computing. IBM does have Cell but Cell is even worse for general computing than the embedded derivatives. This seems to be the reason why IBM is pairing Cell with Opteron. The % power graph also shows a much closer race between Intel 64 and AMD 64 with AMD pulling strongly ahead in the last six months. Also, the second graph tells a different story in terms of Intel's position with 64 bit systems. Although there have been more numbers of systems of Intel 64 apparently these were more smalller systems as the total performance is much closer.

The graph for numbers of processors is similar to the power graph.

However, one difference we can see is that in terms of numbers of processors used in HPC AMD was never behind Intel. They reached rough parity in 06/05 but AMD has been in the lead ever since. Both graphs suggest that within a year AMD will have surpassed Power both in terms of total performance and in terms of numbers of processors. This would appear to be good news for both Cray and Sun with mixed news for IBM. As IBM loses share with Power they do stand to gain with AMD HPC systems. However, Intel clearly has to do something if it plans to avoid being third in HPC behind both AMD and IBM. In terms of processors used for HPC Itanium's numbers are only slightly higher than the old RISC systems which is pretty dismal to say the least while Intel's 64 bit numbers are just a little over half (54%) of AMD's. By almost any standard Intel show's no current hope of being able to regain dominance in HPC. This seems to be a serious issue for Itanium as its market gets pinched ever smaller. Opteron has already driven Itanium out of the 4-way market and it appears that Opteron is also keeping Itanium out of the HPC market. It does not seem realistic for Itanium to survive in the sliver of the server market from 8-way to low end HPC. This also brings up the question of whether Intel is deliberately crippling Woodcrest in 4-way to keep it from rolling over Itanium. For Intel to turn things around it will take far more than they current have and more than they have announced for the next year. However, whether the delay with 4-way is deliberate or just due to poor engineering, AMD is not waiting. Nor does it appear that AMD is waiting to become the final wave in HPC.

That X86-64 will be the last wave seems almost a certainty. There is no chance now for the older RISC systems to make a comeback and there are only two of the traditional supercomputer makers left: Cray and NEC. Itanium does not appear to be capable of challenging the current systems and is likely to fade further in the coming years. While Cray and NEC are working hard it is most likely that they will simply take back some small share that they have lost since 2003. The only real player left is IBM with Power. However IBM's use of lightweight Power derivatives which are only 32 bit and have limited memory addressing in Blue Gene suggests that this architecture too is unsuitable. This is further bolstered by Cell which is even more constrained than the lightweight derivatives. IBM is rapidly becoming a co-processor player rather than a main processor supplier for HPC. In fact, IBM may have to work hard to avoid being completely marginalized by GPU processing systems.

Intel should continue to share in the rise of X86-64 but the lack of announced large scale HPC systems is disturbing. Similarly disturbing is Intel's trend of doubling FSB's on its Northbridge chips. Essentially, the Intel Northbridge is like a mythical Hydra which survives by growing back two FSB's to replace the old one. Intel seems to be getting by with two FSB's now. However, there is some doubt that Intel can deliver quad FSB systems at a competitive price and it will be nearly impossible for Intel to move any higher. This leaves Intel once again facing a deadend while AMD simply beefs up its existing structure. If Intel doesn't do something quickly it will end up giving away nearly all of the top share of servers all the way from 4-way to large scale HPC to AMD. X86-64 seems to be the final wave in HPC with AMD in the lead now and most likely into 2008.

Saturday, October 28, 2006

Intel's Bluff (Q3 06 Results)

It's taken me a little time to go over Intel's finances in detail. However, far from being the glowing outlook that nearly everyone is saying, Intel's financial position is much more precarious. The good third quarter results were actually only a temporary fix created by slashing stock buyback. Unfortunately, even following the buyback patterns from two years ago, this will still leave Intel about $2.5 Billion short at the end of the year. The best that Intel can hope for is that it has a much better fourth quarter than even their best projections.

The overly positive outlook for Intel seems to be based on three assumptions:

  1. Intel is regaining share.
  2. Intel is making more money.
  3. Intel is back to playing its own game.

I've seen some very poor attempts to give Intel credit for a supposed increase in volume share by using a bit of statistical sleight of hand. The statistics for the last three quarters for microprocessor volume are:

Intel - 74.3%, 72.9%, 76%
AMD - 21.1%, 21.6%, 23%
VIA - 4.6%, 5.5%, 1%

Based on these percentages, the naiive claim is that Intel gained 3.1% in the third quarter while AMD only gained 1.4%. This would seem to suggest that Intel gained twice as fast as AMD in the third quarter and, presumably, this would be an indication that Intel is taking back share. Unfortuately, this distorted view is caused by the interference from VIA. VIA only sells at the very low end of the X86 market. Adding their share in with AMD's and Intel's is a bit like adding bicycles to motorcycle sales. We can get a clearer picture by removing VIA from the volume statistics and just showing the volume share between AMD and Intel:

Intel - 77.9%, 77.1%, 76.8%
AMD - 22.1%, 22.9%, 23.2%

The undistorted statistics tell a very different story. We can see that Intel has been slowly losing share to AMD for the last three quarters; quarter three was no exception. Microprocessor revenue share is similar:

Intel - 82.8%, 81.9%, 81.7%
AMD - 17.2%, 18.1%, 18.3%

Clearly, Intel is not regaining share in either microprocessor revenue or volume. Similar distorted claims are based on operating income and cash:

Q2 - Revenue - 8009, Op. Inc. - 1072, 13.4%
Q3 - Revenue - 8739, Op. Inc. - 1374, 15.7%

The operating income as a percentage of revenue appears to be up and Intel boosted its cash by nearly $700 Million in the third quarter. This looks very positive for Intel. However, there is a problem. People who buy Intel stock rely on Intel's stock buybacks to increase demand. In 2004 Intel spent $7.5 Billion on stock buyback and spent $10.6 Billion in 2005. Based on the lower 2004 pattern Intel should spend $7.7 Billion this year. However, Intel has only spent $4.4 Billion so far and should have spent about $1.9 Billion in the third quarter. Instead, Intel only spent $500 Million.

It is clear then that Intel boosted its third quarter numbers by slashing its stock buyback. This makes the third quarter numbers look good but puts Intel $1.4 Billion behind in addition to the $1.9 Billion it would need to spend in the fourth quarter. However, if Intel spends the same as it did this quarter it will end up $2.5 Billion short which will cause its stock to plunge. If it pulls the cash back out that it just put in this would end up only $1.2 Billion short. This is a tough position for Intel. If it doesn't spend any cash then its stock buyback will drop below the 2004 levels and will only be a little ahead of the 2003 levels. This would be a 50% reduction from the 2005 levels and something the stock market surely would not overlook. This could easily cause Intel's stock to slump when the end of year results are released(which will be sharply down from last year). Unfortunately, Intel will not have the money to spend so it will have to choose between spending cash and risking a drop in stock price. From this we can see that Intel's money position is currently worse than it was even in 2004. Intel has not yet recovered in terms of money.

The final assumption is that Intel had to play AMD's game while AMD was ahead in processor performance and now that Core 2 Duo is ahead Intel can play its own game. Well, let's assume for a moment that this is true, that C2D's superior performance is creating lots of demand for Intel and eroding AMD's demand. This could cause AMD to drop its prices even lower to avoid losing too much volume share and this would hurt AMD's margins even more.

The problem is that AMD hasn't lost in volume share; Intel actually lost a little. If the assumption about demand were true then this wouldn't fit with the facts at all.We know that AMD was capacity limited in the third quarter. If demand were strong then Intel should have had no trouble picking up customers beyond what AMD was able to supply. But, this didn't happen. Secondly, the fact that Intel's margins were lower than AMD's and will stay lower in the fourth quarter disproves the notion that AMD has to compete by dropping prices. A similar idea was that Intel was going to get rid of its overstock by selling it at reduced prices and this was supposed to undercut AMD and cause further loss of margin. However, AMD's margins didn't drop all that much and Intel ended up having to take a loss on $100 Million worth of overstock. Apparently, this was only part of the overstock and Intel may have additional losses in the fourth quarter.

The fact that Intel was unable to gain volume share while AMD was capacity limited disproves the idea of extra demand for Intel chips. The fact that Intel didn't gain at all in terms of revenue share also disproves the idea that Intel's chips are more valued. Intel finds itself faced with a competitor who is serious about growing capacity. The only way of stopping this would be to somehow reduce demand for AMD chips and this hasn't happened. Intel seems to be overlooking the fact that having two FABs plus second sourcing from Chartered makes AMD a very reliable supplier; Intel has lost this advantage. Intel has been the strongest player by far in terms of integrated graphics for both desktops and mobile. However, now that AMD has ATI Intel faces a whole new level of competition in these markets.

AMD is currently taking mobile share from Intel. Many have assumed that Merom, the mobile version of Conroe would easily hold this market for Intel. However the fact that Intel will keep making the lower performing Yonah until the end of 2007 suggests otherwise. It appears that Merom is having more difficulty with power consumption than the older Core Duo. AMD's Turion should compete with this very well as it moves to 65nm. This seems to have been a strategic mistake for Intel and not one that it can fix soon. Faced with an inability to manage multiple processor projects, Intel lumped everything together with Core 2 Duo. This chip tries to do the job of server, desktop, and mobile. Apparently, it isn't doing mobile as well as it was expected. This unfortunately occurred at the same time that AMD decided to split mobile off into a separate family. This seems to be what will give AMD the ability to take share in mobile away from Intel. Intel surely realizes its mistake and is probably frantically trying to reform another all mobile team as it had with Pentium M. However, this is likely to set Intel back into 2008 and it can lose a lot of share during that time.

The one size fits all strategy with C2D is also not working as well as it could with servers. Woodcrest doesn't do 4-way and Intel won't have a 4-way until Q3 07. This means that during this time Intel has to compete with the outdated Cedar Mill based Xeons. The result has been that Intel has not been able to take back any of the 4-way and higher share that it lost to AMD both from Xeon and Itanium. Given AMD's recent wins in supercomputers with Opteron it seems that AMD will remain strong in the top end of servers well into 2009. Although Intel has made some gains in 2-way servers it will soon be faced with both lower power 65nm based Opterons and a native quad core design with K8L. This is a fairly grim prospect for Intel as it won't give them much time to gain any share and even then only at the bottom. Further, Intel appears to be behind in base architecture and it doesn't appear that they will catch AMD until 2009. AMD has a good chance of reversing any server losses during that time and taking additional server share.

The sole bright spot for Intel is the desktop. Or maybe it isn't. This depends on how much of Intel's third quarter volume came from moving lower priced P4 stock. It could be the case that Intel's rise in desktop volume share was only a one quarter bump and will drop again in the fourth quarter or even the first quarter of next year after it moves more overstock in the fourth quarter. At this point though there isn't any way to tell. It seems reasonable though that, with increasing pressure from AMD within the corporate market with its Stable Image Platform and integrated graphics from ATI, AMD is not likely to lose very much share. Its deals with the two highest retailers in China and its deal with Dell also suggest that any volume loss on the desktop will be limited. Some have tried to argue that Dell is rapidly losing ground and therefore won't help AMD. However, this seems to be more of a sour grapes argument than anything else. Looking over Dell's financials I was unable to see more than a drop of about 4% and this is hardly proof of any downhill slide for Dell. Intel dropped much more than this during 2006.

Although it has been suggested that AMD's current capacity constraints will cause it to lose customers this logic too does not appear very sound. AMD's capacity will increase rapidly next year so Intel can't count on capacity constraints for AMD unless the market grows much more rapidly than it has. Then too, Intel still would have to turn these limitations into demand for its own products as it was unable to do in the third quarter.

Intel is also unlikely to improve its popularity with vendors. Even though AMD now has ATI it is quite willing to let its customers use other brands of chipsets if they prefer. Intel in contrast, is much more insistent about pushing its own products as it has with its exclusive chipset policy for Centrino.

I have been unable to find any evidence in the third quarter reports that Intel's prospects are better than AMD's. Intel has been unable to create demand or decrease demand for AMD. Intel will find itself in a defensive position trying not to lose share in mobile and corporate accounts while trying to push a single chip design that is not fully adequate for either server or mobile use. It has to do this against a tough competitor who is putting huge amounts of its earnings into capital expenditures to grow its capacity. On top of this, Intel will find itself with a very disappointing 2006 earnings report and enormous pressure on stock buyback with money that it won't have. It is likely to be faced with the prospect of either spending down its cash even more or watching its stock price plunge. From all of these disadvantages it is clear that Intel is not playing its own game.

Sunday, October 22, 2006

Tigerton or Kittenton? Memory Amnesia.

The glowing reports about Intel's roadmap for 2007 continue. Central in this enthusiasm is the native quad core Tigerton which is supposed to be the platform that will keep Intel ahead of AMD's K8L technology. However, in evaluating this platform most people seem to have forgotton the memory bandwidth lessons from P4 and Athlon 64. This amnesia of memory requirements has led to exagerated expectations of performance for Tigerton.

The diagram above for Tigerton looks impressive. Surely four buses with an aggregate bandwith of 34 GB/sec would be enough. Or would it? Just think back to 2002 and 2003 when P4 was so strong against K7. I remember how Intel enthusiasts bragged about the 800Mhz FSB for P4 which was well ahead of what K7 had. Curiously, while these same Intel enthusiasts thought 800Mhz was necesary for one core they now seem to be insisting that 1066Mhz is enough for four cores. Let's consider this more carefully.

We know that when Intel increased its FSB from 400Mhz to 800Mhz that it didn't use all of the bandwidth. We also know that Athlon 64 seemed to get along okay on socket 754 which only contained one memory channel. One memory channel on socket 754 was basically the same as the 400Mhz FSB for P4. It is difficult to imagine that anyone today would suggest that this was more bandwidth than these processors needed. I think clearly that this level for one core is the most reasonable starting point. Let's see where this takes us.

If we need one memory channel with DDR 400 for one Athon 64 core then the dual memory channels with socket 939 and 940 would seem to be enough for X2. Likewise, an 800Mhz FSB with two channels of DDR 400 or DDR2 400 should be enough for Intel's dual core Preslers, Conroes, and Woodcrests. If this is the standard then both AMD and Intel clearly have more bandwidth than necessary for dual cores. AMD's Integrated Memory Controller (IMC) allows expansion beyond two sockets and Intel's 5000 series chipset with two buses again allows expansion to two sockets with similar memory bandwidth. Dual core today is well in hand. Let's look at more cores.

Intel will soon release the quad core Kentsfield and AMD will release the quad core Barcelona in Q2 07. The above diagram is for Tigerton which most likely would arrive in Q4 07 but could arrive in Q3 07. Although Intel does say Q3 07 the chips may not arrive in volume for another two months if recent releases are any indication. At any rate, we know that dual core works well but will quad core work the same? If an 800Mhz FSB is required for dual core then reasonably a 1600Mhz FSB would be needed for Kentsfield or Tigerton. We know that Kentsfield will have a 1333Mhz FSB at most and may only have 1066Mhz. A FSB of 1333Mhz would only be equivalent to a Conroe with a 667Mhz FSB. This would be equivalent to a 333Mhz FSB for P4. We can probably skip comparing with a 333Mhz FSB single core P4 because it is possible that the longer pipeline changed the bandwidth requirements. Since Core 2 Duo (C2D) is not available in single core it seems reasonable to compare with the single cored Athlon 64 which also has shorter pipeline. For Athlon 64 this would be the same as using the single channel socket 754 and using DDR 333.

It does seem curious that no one uses a Conroe with the FSB set at 667Mhz since this is what is being claimed is adequate for Kentsfield. However, the question of whether or not Kentsfield can do 1333Mhz on its FSB is moot since the above diagram for Tigeron only shows an aggregate of 34 GB/sec for four buses. 34 GB/sec for four buses is only 1066Mhz per bus. This is only equivalent to a Conroe with a 533Mhz FSB or a P4 with a 266Mhz FSB. The equivalent for AMD would be an X2 or Athlon 64 with DDR 266 on socket 754. To make things worse, the memory speed listed in the diagram is incorrect. To keep up with four FSB's running at 1066Mhz, Intel will need DDR2 (or DDR3) running at 1066Mhz as well. The only way that the above diagram would work with 667 Mhz memory would be if the number of memory buses is wrong and it actually has six memory buses instead. However, even if the memory is able to keep up the FSB speed is inadequate for four sockets.

As far as I can tell the only reason for this recent outbreak of amnesia for memory requirements is the sloppy testing over at Tom's Hardware Guide. Apparently, THG is on some kind of crusade to prove that Intel has the best hardware even if THG has to fake the tests to prove it. It doesn't seem to do any good to criticize the testing at THG because the excuses from Intel enthusiasts seem to grow exponentially in proportion to how bad the testing is. However, not matter how sloppy or unprofessional or biased the testing is at THG there really is no escaping common sense. A Tigerton with four buses of 34 GB/sec aggregate bandwidth is only equivalent to a Conroe with a 533Mhz FSB. I'm curious why THG doesn't run a Woodcrest test with the FSB set to 533Mhz to show what the expected performance with Tigerton will be. Tigerton should be double a Woodcrest with 533Mhz FSB. The comparative proof for Kentsfield is easy as well since you only need to set the FSB to half the FSB speed for Kentsfield to get the same memory bandwidth.

The notion that a Tigerton can run four cores with a FSB of 1066Mhz is beyond ridiculous. This would only be 533Mhz for Conroe and equivalent to DDR 266 for both X2 and Athlon 64 on socket 754. Even the old Barton Athlon XP 3200+ used a FSB of 400. To get as low as Tigerton we would have to go all the way back to the Athlon 2600+ which used a 266Mhz FSB. None of the P4's were ever this low as even the original 1.4Ghz Williamette's had 400Mhz FSB's. We would have to go back to the PIII to get down to 266Mhz on the FSB.

It is clear that memory bandwidth is going to be a serious problem for Intel and is going to set Tigerton's performance back badly. The question then is how well AMD stacks up in the memory bandwidth race. The socket 753 Athlon 64 used one channel of DDR400 memory. This was doubled to two channels with socket 939 and 940 so this would be the same equivalent bandwidth for X2. Presumably, Barcelona would need double this or 800Mhz memory. This shouldn't be a problem as even the memory controller on Revision F is about to handle DDR2 800. This would be equivalent to 1600Mhz and well ahead of the 1066Mhz for Tigerton. In fact, a little math shows that this is fully 50% more bandwith than Tigerton will have. This means that in memory intensive operations Tigerton will bog down to 33% slower than Barcelona or you could also say that Barcelona will be 50% faster.

Looking at the Caneland chipset I can say that moving to quad buses is a step up from the limited dual bus 5000 chipset. I can also say that the 64 MB snoop filter cache is a great idea. This is basically a map that prevents cache coherency traffic from being retransmitted across to other buses unnecessarily. However, this is bad because it indicates that the FSB will still carry the cache coherency messages. The snoop filter won't help when the cache coherency messages must be transmitted to another bus. It is not nearly as good as AMD's design where none of the cache coherency messages effect memory bandwidth. It is also disappointing to see that Intel will still be using the outdated MESI protocol rather than a more advanced protocol like MOESI as AMD uses. This too would reduce cache coherency saves and loads. When another chip needs to access a memory location that is in another chip's cache, MESI requires that chip that has the data save it to memory whereas MOESI can allow sharing without having to save.

The Tigerton server chip is an upgrade to Woodcrest and will at least give Intel something to replace its aging Cedar Mill Xeon chips and finally let C2D go beyond 2-way. However, because of memory bandwidth constraints, Tigerton will be proportionately slower than Woodcrest. Secondly, the octopus-like design of the Caneland Northbridge with four FSB's and four memory buses is not going to be compact or inexpensive. Finally, this limited four bus design will not allow Tigerton to move up to bigger 8-way and 16-way server designs as AMD will have. In conclusion, it appears that although Tigerton looks good, it will be held back by the memory bandwidth of the Caneland platform which is as low as what was used by PIII and Athlon 2600+. This will cause Tigerton to get beaten badly in memory intensive applications, making it more of a kitten than a tiger. Clearly, memory bandwidth will be Intel's biggest problem into 2009.

Thursday, October 19, 2006

A Real Forecast

Although there have been many projections lately that favor Intel, it is my guess that these are based largely on old biases towards Intel. I believe that a more careful look at AMD and Intel shows that AMD's performance and current position are better than Intel's. And, although I believe that Intel hit bottom in the last quarter and will now grow, it seems likely that AMD will grow faster during 2007 and 2008.

For recent performance we can see that AMD clearly hit its stride in the fourth quarter of 2005. This quarter was the best quarter in Intel's entire history. Yet, AMD was able to increase its processor revenue share from 12% to 15% during this same quarter. It is staggering to think that AMD pulled revenue away from Intel while Intel was at its best. However, these gains by AMD left Intel unable to rid itself of its inventory overstock which increased 11% from the previous quarter. In contrast, AMD reduced its own inventory by 58%. Intel began to drop and hit bottom just two quarters later in Q2 06. Intel has been unable to rid itself of its overstock and it has continued to build since Q3 05. Today, AMD's inventories are less than half of what they were in Q3 05 while Intel's are 60% higher.

The best that can be said for Intel is that they've hit bottom and are slowly growing again. However, the frantic scratching in the dirt by some in an attempt to put a positive spin on Intel's numbers is truly amazing. I've seen people suggest that Intel is now doing better than AMD. Unfortunately, statements like this are purely delusional. The reality is that 2006 is a very bad year for Intel. This will be the largest processor revenue drop for Intel since 2001. Short of a miracle (which even Intel does not project) in Q4 06, Intel's total yearly processor revenues for 2006 will be much lower than 2005's and only about equal to what Intel received in 2004. In contrast, AMD's processor revenues for 2006 will be double what they were in 2004. I'm baffled how zero growth in two years versus 100% growth could be equal or ahead for Intel. Clearly, AMD has done very well and Intel has not.

AMD's processor revenues are up 33% from the Q3 05 while Intel's are down 21%. Faced with dismal numbers like these, those who favor Intel have resorted to looking only at this quarter versus last quarter. However, even here there is no place to hide. Intel's processor revenue's increased 8.8% from last quarter. However, AMD's increased 10.1%. The fact that AMD's margin dropped more from Q2 06 to this quarter has been tossed out with glee by those seeking to fabricate a better outlook for Intel. Howevever, the only reason that this is true is because Intel's had already dropped badly during Q2 06. Today, Intel's margin at 49.1% is still below AMD's at 51.4%. I find it amazing that some don't see how noteworthy this is. Intel has been consistently ahead of AMD and usually be several percentage points. Further, the overall drop has been far worse for Intel. Intel's margin dropped from a recent high of 61.8% in Q4 05 while AMD's dropped from a recent high of 58.5% in Q1 06. This is a 21% drop for Intel versus a 12% drop for AMD. None of these numbers favor Intel. Yet, one doesn't have to look very far to find people proclaiming that these are great numbers for Intel and that they show a glowing future. However, there is no reason to believe the phoney outlooks and no reason to look at Intel with rose colored glasses.

AMD has had very strong demand (up 50%) for its mobile chips. Unfortunately for Intel this is not likely to improve. AMD's 65nm mobile chips will be out soon and will have lower power draw which is a good thing for mobile. AMD is also certain to get a boost in mobile chipsets from ATI which takes away the strongest advantage that Intel has enjoyed with its Centrino line. A loss of share in notebooks is something new as this has been the area that Intel has held onto the strongest. Similarly, AMD's very aggressive move into integrated chipsets gives AMD a good boost for both corporate client computers and budget systems. The budget category lines up well with AMD's recent partnership with the two largest computer retailers in China. The client systems are likely to be a good complement to the already increased offerings by HP, Dell, Sun, and IBM in AMD servers.

Intel is pressuring AMD hard in 2-way servers. This is not surprising as Woodcrest has impressive SSE performance and works quite well with dual core and dual socket with the dual bus 5000 chipset. The only bad part is that this chipset uses FBDIMM which already has a limited lifespan. Worse still, this technology will not grow large enough to become profitable while Intel will have to continue support to the many customers who have already bought or are buying these systems. This will be a future drag on Intel although it only a small one. AMD would pull ahead on 2-way systems in Q2 07 except Intel should have a non-FBDIMM chipset available which will remove the disadvantages of the FBDIMM technology. So, AMD should be about equal on 2-way dual core systems which will prevent Intel's gaining back share. However, Intel will fall behind on quad core systems and will not be competitive on 4-way sooner than 2009. This is the case because, without CSI, Intel cannot use an integrated memory controller. Without both of these Intel simply does not have the base architecture to handle dual core 4-way or quad core 2-way or higher nor has Intel suggested upgrading to a quad bus chipset. AMD should continue to make gains in 4-way and should start making gains in 2-way after Q2 07. This does at least give Intel time for a couple of good quarters with 2-way however it is unlikely to make any strong reversals in servers. Worse still, Intel then loses the advantage until sometime in 2009.

The desktop is Intel's strongest position in the near term. Kentsfield will have little effect for Intel since this is a very small market and will be countered at the top end by 4X4. Secondly, Kentsfield will be countered in Q3 07 when AMD releases the native Altair quad core. Judging from the roadmap for Pentium E 1000 and Celeron D 400 chips, the desktop clock speeds will not increase as quickly as some have suggested. AMD should be able to counter these with Rev F and G chips while competing at the high end with dual core versions of K8L. There does not appear to be any advantage for Intel in Q3 07. This would suggest that Intel's sole strategy for pulling back ahead of AMD will be a move to 45nm. However, this move is not likely to be as successful as some have suggested. In 2008, less than half of Intel's FABs will be 45nm while both of AMD's 300mm FABs will be ramping to 45nm. The advantage of APM will finally be felt as this will make extremely rapid transfers between the two FABs possible. Intel on the other hand will still require two months to move a chip or process from one FAB to another; AMD will be able to do this the same day. Two similar FABs should allow AMD even tighter control over costs although AMD's costs will fall steadily through 2007 as FAB 36 continues to ramp. The costs for 65nm on the 300mm FAB 36 are far lower than the costs at 90nm on the 200mm FAB 30. Unfortunately Intel will not see this same reduction in cost as it is already using 300mm FABs and will already have converted most of its capacity to 65nm by year's end. These reductions in cost should pull up AMD's margin even if Intel continues the price war.

I believe that many (including people at Intel itself) still have not come to grips with the reality that Intel can no longer grow its way out of trouble. Further, Intel is facing a competitor who now has two FABs and is using 300mm. In 2002 or even into 2003, Intel's current price drops would have been far more effective. Today, they have merely slowed AMD's growth while hurting Intel more. Eventually, the reality that AMD now has products spread among desktop, server, and mobile as well as second sourcing from Chartered and soon chipsets from ATI will be unavoidable. It will also become clear at some point that AMD's HyperTransport consortium is paying off with a low pricing model along with the Torrenza initiative. Intel's copycat strategy is not likley to have the same benefit and will take two years to not catch up to where AMD is now. The proposed Geneseo and CSI standards are about as fast but still less flexible than the current HT 3.0 standard. It is entirely possible that HT could be at a 4.0 or even 5.0 standard by the time CSI makes it to hardware. AMD has at least two other possibilities to compete with Intel's 45nm in 2008. These include the possibility of using TTRAM or Z-RAM for cache. This is not an option for Intel as it requires SOI. Another possibility is using the GPU as a parallel coprocessor. This could negate any boost in SSE speed. Again, it is unfortunate for Intel that using a GPU for procesing is easier with HT than with using the FSB. And, whatever effort Intel does put into this would be wasted when CSI is released in 2009.

I don't see any great gains for Intel in the fourth quarter. I'm guessing AMD will increase at about the same rate and hold onto its roughly 22% volume share. I expect Intel to grow during 2007 and 2008 but I expect AMD to grow faster and increase share. I would expect Q1 07 to be Intel's high point with servers and Q2 07 to be Intel's high point on the desktop. Overall, I would expect Intel's revenue's in 2007 to match the 2005 revenues. I don't honest see how Intel could realistically take back share from AMD given all of AMD's proejcted advantages with cost, volume, and the partners and customers it has lined up. I expect AMD's margins to rise regardless of Intel's pricing strategy due to AMD's conintued drops in costs. AMD has clearly divested of the most unprofitable sections of the company while Intel has made a less serious effort. Intel may have to revisit the issue of divestment if it cannot get its margins up. I don't see any possible way for Intel to grow at 30% while AMD grows at only 15% during 2007. Intel show grow but AMD should grow faster.

These are comments I made in December 2004.

I've been thinking lately about what is going to happen in the next year. I know that some are desperately hoping and that others are at least suggesting that Intel will make a comeback. But, so far, I can't see it.

The comeback for Intel didn't happen. AMD retained its share during 2005.

It is clear that Intel's dual core strategy is threefold:

1. Release dual core Prescott chips to slow down the erosion of the workstation/low end server market. This won't actually work very well since these chips will be starved for bus bandwidth. Expect Intel to pump up the cache. This strategy would put another company out of business but with all of that spare fab capacity Intel will only take an embarassing margin hit.

This was pretty accurate. Intel released Smithfield and then followed up with Presler. The dies are large and Intel still uses the large cache approach on the Xeon units. These processors have been ineffective against Opteron.

2. Release dual core Dothan based chips to slow down the erosion of the desktop market. Intel is hoping that just one of the benchmarks will favor this chip. This is not a great strategy but it really is all Intel has since, without being able to keep up with Prescott, Intel's only other choice is to fall farther and farther behind.

Yonah based on Dothan was next. Yonah was also not very impressive on the desktop.

3. Work on something more reasonable for 2006. This is Intel's real strategy although they won't actually admit this to their shareholders, employees, or customers. Intel is praying that they can get something out the door in 2006 that will give them a fighting chance.

At the time, no one else was talking about a new design for 2006. The talk was that Intel was going to release something competitive in 2005 which did not happen.

In all honesty, I don't think Intel has hit bottom yet nor do I think AMD has hit its full stride. I think things will be better for AMD and worse for Intel in 2005. Maybe in 6 months things will look better for Intel in 2006 but right now not even that looks promising.

Since my past comments seemed to have been accurate perhaps my latest ones will be as well. It appears to me that AMD will exit 2006 in the strongest position it has ever been against Intel. This should be a good reason for a positive forecast for AMD.