Feeds

Fabless chip companies are flawed, AMD claims

Rise or fall?

  • alert
  • submit to reddit

Protecting users from Firesheep and other Sidejacking attacks with SSL

The going will be tough for new fabless CPU companies –- Rise, Transmeta and others of that ilk –- predicts Dana Krelle, AMD vice president. Fabless companies are operating a flawed business model, which will turn them into bottom feeders, he claims. “Only by innovating ahead of Intel are you able to add value,” he says. Fabless chip companies will be unable to do this, he says. “The trouble with foundries is that they want their 50 per cent profit margin,” he says. Throughput at contract foundries is rarely at optimal capacity, he says. And operators do not supply access to bleeding edge technology at the design stage. The upshot is that fabless chip design companies into the unprofitable, down market sector. “It’s a business that’s damn hard to survive,” he says. Krelle bases his judgement on his previous life with Nexgen, a CPU house more or less forced into merger with AMD a few years back. “There used to be two big fabless chip companies – Nexgen and Cyrix – where are they now? Nexgen is part of AMD and Cyrix is part of National Semiconductor.” Speaking at Comdex, Krelle argues that AMD has pulled far away from the rest of the pack – including NatSemi. “Intel and AMD are the only two companies that share both following characteristics: ownership of foundries and multiple, top-notch design teams that keep innovating on a multi-generational basis.” The inference we are to draw is that NatSemi/Cyrix is hamstrung because it works on single lifecycle upgrades. With the introduction next year of the K6 Sharptooth and the K7, is ready to take on Intel in all market segments, Krelle claims. Operating at 400MHz clock speed, Sharptooth outperformed the Intel Pentium II 450MHz in ZD Winbench tests, in a demo shoot-out arranged for The Register’s benefit at AMD’s meeting rooms in the Las Vegas Convention Centre. “We’re not optimised for clock, we’re optimised for performance,” Krelle said, in what sounds like a well rehearsed soundbite. At one point Atiq Raza, AMD’s co-chief operating office and chief technical officer, ambled in, explained the company’s difficulty in positioning Sharptooth against Katmai, and then ambled out again while discussing an email concerning a meeting Microsoft with an underling. Now what could that be about, we wonder? Sharptooth is pitched at the performance segment of the market – and will take into the high-end consumer business, Krelle says. He rejects suggestions that Sharptooth is a short shelf life transitional technology, bridging K6-2 and K7. When the chip moves to .18 micron level production at the end of 1999 t becomes feasible that Sharptooth becomes the entry-level product,” he says. K7 will fit inside PCs in the $1,995 -$2,995 bracket, Krelle revealed. The K7’s strong floating point performance will take it into the graphic intensive market. We imagine that Intel-hater Intergraph will be among the first in the queue to place their K7 orders. In a demo, Krelle put the K7- powered PC through its paces, in which a DVD software version of Godzilla the movie was played. Graphics performance was certainly impressive. And launch date for the K7? “This is first silicon,” Krelle says. “We’re on track (for shipping) for the first half, next year.” It’s a tough life being the Avis of the computer industry. Trying harder in AMD’s case means having to second guess Intel on technology and market positioning fronts. Pricing is not such a big issue, according to Krelle, secure in the knowledge that any price war would hurt Intel more. Wall Street punishes any Intel failure to meet the numbers very severely. “It is a fine outcome when a market ends up with two companies, both of which are nicely profitable,” Dana Krelle, AMD says. “That’s the way it works in many industries.”

It all sounds very cosy. We’ll just have to wait for next year’s publication of AMD’s deposition in the Intel FTC anti-trust case -- to bring out the attack dog in the company. In the meantime, AMD is contenting itself with playing hardball on the technology front. ®

Website security in corporate America

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.