Vol 19, Issue 30

July 25, 2005

AMD vs. Intel: New Round?

By Kevin Krewell

In my March 2005 editorial, I recounted the history of the product battles between AMD and Intel. The latest battle returns the two companies to the courts. This time, though, AMD is suing Intel over business practices, not contracts. For many years AMD has complained about Intel's business practices, and it cheered on the FTC probe into Intel in the mid-'90s. Not until this most recent action, however, had AMD directly taken Intel to court over AMD's claims of anticompetitive business practices.

Intel is the largest and most profitable semiconductor company in the world, and its great wealth is based mostly on its dominance in the PC processor and volume-server processor businesses. Only AMD has had the tenacity (or just incredible stubbornness) to compete against Intel for two decades and be able to hold more than a single digit of market share. Ironically, AMD got into the x86 business not by its own actions but by being convinced to second-source the x86 architecture at Intel's request. Surely one decision Intel's management regrets every day!

Who's Afraid of the Big, Bad Intel?

The only other processor company still in the PC-processor business, VIA, holds only a 1–2% market share. Every other company that has tried to compete with Intel in the x86 processor business left the market. The list includes IDT (sold the Centaur division to VIA and that group is now the designers of VIA's processors); IBM (Cyrix foundry and second source; also created "Blue Lightning" 386 processor); Harris Semiconductor (CMOS 80286 processors for military and industrial applications); NexGen (merged with AMD); Cyrix (bought by National Semiconductor and later sold to VIA and disbanded); Rise Technology; SGS-Thomson Microelectronics (Media GX second source and Cyrix foundry); TI; and UMC. And those with long memories will remember the 8086-level products from Chips and Technologies, VLSI, and Vadum as well. The industry is littered with the bones of Intel's competitors. This is clear evidence that Intel is a very tough company to compete with on its home turf. No one, even Intel itself, would disagree with the foregoing statement; in fact, most would consider it an understatement.

The question that will have to be answered is whether Intel's tough business practices went beyond the bounds of legal behavior, and, if so, whether AMD can prove it. It will be a very long road ahead for AMD. Through this process, AMD will also be putting its own customers in awkward situations by subpoenaing documents and people to testify. Will even the most sympathetic AMD supporter be happy being called to testify against Intel?

We're not in a position to determine whether AMD's claims are valid and can be substantiated. But this investigation may move faster than we expected. The European Commission raided the offices of Intel and a number of European manufacturers on July 12, 2005, which could have been precipitated by the AMD actions. We encourage our readers to keep an open mind in this case, but also to be informed. We'll do our best to keep the coverage unbiased. If you have any opinions about this case and our coverage (and who in our industry doesn't have an opinion on Intel and its relationship with AMD?), feel free to drop me a note.

Spring Processor Forum '05 Keynotes Now Online

On a far less controversial topic, In-Stat now has the two most popular presentations from Spring Processor Forum 2005 online for free download. The Wally Rhines (CEO of Mentor Graphics) keynote, "Moore's Law Is Unconstitutional," and the Jim Kahle (IBM Fellow) special presentation on the Cell processor are both available for download on the website at: www.in-stat.com/spf/05/. The download is free, but we do require registration.