Date:
Monday , April 30, 2007
Author:
Kyle Bennett
Editor:
Joey Seiler
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State of the Silicon Union - Q207

Where are AMD, Intel, and NVIDIA headed? We give our thoughts and predictions about what is going to happen in the computer technology market place over the next few years.

It has been a while since I have written an editorial about what the industry looks like from the helm here at HardOCP, but as I am flying out to California to see the latest in video technology, it seems to be about that time again. Much of the time, the writing is on the wall, and typing an editorial that takes a broad view of the CPU, GPU, and motherboard chipset world is sometimes about as worthwhile as tits on a boar hog. At this time, though, I think that many in the enthusiast crowd may not be seeing the big picture, hence the point of talking about it here.

There has been a lot of Chicken Little syndrome surrounding AMD....and when I say AMD I mean both AMD and ATI. The “sky is falling” drama has been repeated more times than I can count on public forums, but it’s not true. Is AMD getting its ass kicked right now? You bet. Given the fact that its current sales depends on aging K8 and X1000 architecture, you can bet that sales are way down. AMD is constantly losing market to Intel Core 2 Duo processors and NVIDIA 8800 series video cards.

We have taken a lot of slings and arrows in the past for pointing out that Intel's somewhat distorted marketing of the Core 2 Duo line of processors means little to gamers. The fact, however, remains that there are very few cases in which the gamer will see the advantage of using a Core 2 Duo system when gaming over a comparably scaled Athlon 64 X2 or FX, Supreme Commander withstanding. But if you go back and read exactly what we have written and not what some anti-[H] zealot has posted on a forum, you will see that we have championed building with Intel's Core 2 Duo for new systems...just like I did for myself recently. There has been little reason to leave your AMD build unless it was simply showing its age, but now there is little reason to build or buy a new AMD system. Bring into play that the Core 2 Duo processors have been tremendously overclockable and that they run at greatly reduced power envelopes compared to previous Pentium 4 processors, and you will see that us computer enthusiasts have left AMD behind to tweak away happily with our modestly priced Core 2 Duo processors. There is no doubt that enthusiast purchasing patterns are impacting AMD processor sales. Reports are that AMD's market share has quickly eroded as much as 5%. Throw into the mix the abortion that was “4X4” and enthusiast confidence plummets. With AMD Agena FX processors, the next-gen quad-core core codenamed Barcelona, not looking to be primed for desktop systems till very late this year, it is no wonder that many enthusiasts are worried about the health of AMD as a competitive company.

And then AMD just spent US$5.4 billion purchasing ATI. ATI is a company that is looking downright gloomy over the last three quarters. So-so motherboard chipset offerings and forgetting to show up to challenge the NVIDIA 8800 series has many folks looking around wondering what the hell is going on, and certainly many more are wondering just what the hell do you get for $5.4 billion now days. But wait, the R600 next generation GPU is about to spring to life you say. Yes, you are correct; the Radeon 2900 XT is on the way. I don't, however, think it will be a savior...or worth $5.4 billion. In fact, I think the R600 is going to very much a lemon. I truly hope I am wrong, but I just don't see its adoption into the market place. The 2900 series is an erratic power pig at best, and many people will have to be considering a very healthy power supply upgrade to even consider installing one in their gaming machines. My current new build has a 600 watt power supply in it and draws over 400 watts at the wall. Considering 75% efficiency of the power supply, I should be able to shoehorn in a new 2900 XT, but I don't know if I am really comfortable doing that. My point here is that many users will find that simply upgrading to the next-gen 2900XT may not be that simple at all and others will be appalled at its inefficient build qualities. NVIDIA had its own problems with the current 8800 series and on the top end it draws almost 50+ watts less than a 2900 XT. Pushing these power envelopes up to such great heights does not exactly bode well with the larger system builders in our market. Mass production of inefficient systems that produce more BTUs than a Home Depot $29 electric heater is not what Dell, Gateway, Alienware, and HP want. And whether you like them or not, these builders have to be onboard to make a product successful. While the enthusiast has huge impact on the very upper end of the market, these big builders bring the volume that is needed for us to see an enthusiast-heralded product be a success.

So does it pretty much suck to be AMD right now? Yes it does. What is really sad about all of this is it that it does not look to letting up until very late this year with the introduction of Barcelona quad-core processors into the enterprise market place. Barcelona will be a very powerful processor, and there is no doubt in my mind that it is going to be successful in the enterprise space, but it will be 2008 before I think AMD's bottom line will see any positive impact from Barcelona processors either in the enterprise or desktop space. The one area where AMD will have some success is in mid-range and low-end video card sales. Sadly, though, these products do not generate the buzz or create the fanfare that a top-end product does, so AMD's successes here will simply be less evident. The RV610 and RV630 GPUs look to be very capable and very power efficient parts. Combine that with Vista Premium badging, DX10 capabilities, compact and efficient die sizes, and a healthy dose of marketing and then not all is lost on ATI’s end of the equation. But still you don't become market leaders by building GPUs and video cards that are just made for getting by when looking at a fancy Vista desktop. Just ask Matrox how making something that is “just OK” will impact your corporate stature.