AMD Wants To Stop Being Known As The “Cheaper Solution”

[csbin]

http://www.ubergizmo.com/2015/05/amd-wants-to-stop-being-known-as-the-cheaper-solution/

If you were to take a look at the high-end gaming rigs, both desktop and laptop, you’ll notice that they all have one thing in common – Intel processors. In fact if you were to shop for a budget laptop or PC, you will find that sometimes these PC OEMs will offer up AMD processors to help make their products cheaper.

However it seems that AMD has had enough and wants to stop being known as the “cheaper solution” in the eyes of the public and wants to be known for its high-end and high-performance chipsets instead. According to the company’s CEO Lisa Su, how they will achieve this is through a high-investment in the x86 field.

Su was quoted as saying during the AMD Financial Analyst Day as saying, “It’s extraordinarily important to ensure that we have competitive, high-performance cores. We have reduced our low-end PC exposure. When you look at AMD’s historical business, we were very, very heavily concentrated in consumer, low end PCs, that was actually our speciality.”

Now AMD knows they have a long road ahead of them, especially when you consider that companies such as Intel have an advantage in terms of having their own fabs, while AMD’s chief rival in GPUs NVIDIA has more cash on hand, plus a very obvious dominance of the market at 76%. However AMD is hoping that with their new lineup of products this year and also in 2016 that they will be able to get onto the right path.

 

[Jimzz]

Then build a CPU that is worthy of being in a high end gaming system.

AMD was the high end gamming computer CPU for a while so its not like they do not know what the market wants in that area. With that said the high end gaming market is not as valuable as it once was. Many are content playing games on their phone/tablet. That and even mid level CPUs can game well now if you have a good GPU.

 

[richaron]

AMD isn't the "cheaper solution" to me. My athlon 500MHz was faster than a P3 550, and my athlon xp 1900+ was the fastest box at my college. And they held a lead for many years after.

They still have a niche, and may play second fiddle these days, but anyone who only knows them as the "cheaper option" doesn't know much about PCs.

 

[CHADBOGA]

Sounds like Lisa Su realises that x86 is where you can make decent margins on CPU's.

I suspect this is the beginning of the softening up process that ends with the announcement of the defunding/cancellation of K12.

 

[Arachnotronic]

Sounds like Lisa Su realises that x86 is where you can make decent margins on CPU's.

I suspect this is the beginning of the softening up process that ends with the announcement of the defunding/cancellation of K12.

I think AMD will stop developing custom ARM cores past K12. They will probably integrate off-the-shelf ARM cores into SoCs that absolutely demand ARM, but even then they'll find the market for that is probably not pursuing for them.

 

[frozentundra123456]

This sounds like one of those Captain Obvious statements. AMD is the budget solution because that is where their performance puts them. FX 8350 and its follow up processors weren't intended as budget processors. They came out comparably priced to a high end i5. The market forced them into the budget category. It will be interesting to see if they can pull it off, but basically they are betting the farm on servers, since zen with no lgp will appeal to a very small segment of the overall PC market.

 

[Shehriazad]

To be honest...only in the past 4 years has AMD been "just the cheaper solution".

At least on the CPU side...they were always taking names (well, "always").

And while all is looking grim for AMD right now...I would love to see them throw down the glove one more time...simply because I love having an actual choice.

If Zen fails...I'll have to go Intel no matter what...since, y'know..I need reasonable performance. But I'd still like for Zen to be a success.


And their GPUs...well...who knows, the 400 series might be the one, even though it has to fight Pascal.

 

[frozentundra123456]

AMD isn't the "cheaper solution" to me. My athlon 500MHz was faster than a P3 550, and my athlon xp 1900+ was the fastest box at my college. And they held a lead for many years after.

They still have a niche, and may play second fiddle these days, but anyone who only knows them as the "cheaper option" doesn't know much about PCs.

Or they are living in the past. You are right though that when AMD had the performance lead they certainly weren't above raising prices to very high levels.

 

[Flapdrol1337]

I guess (and hope) this means the "390x" or whatever it'll be called will be a powerhouse.

if it really is hbm+massive chip+watercooling it should.

 

[Intervenator]

AMD isn't the "cheaper solution" to me. My athlon 500MHz was faster than a P3 550, and my athlon xp 1900+ was the fastest box at my college. And they held a lead for many years after.

They still have a niche, and may play second fiddle these days, but anyone who only knows them as the "cheaper option" doesn't know much about PCs.

That is using flawed logic, crazy deductions, and is honestly somewhat insulting. Fact is, AMD IS the cheaper solution NOW. That is why they ARE seen as the cheaper solution by anyone living in 2015, and that is also why Lisa Su wants to make it CLEAR to investors that she still has not given up on high margin products. Whether this is just AMD hyping up investors (like usual), or there are actual products in the pipeline to back up her wishes, only time will tell.

 

[Intervenator]

I guess (and hope) this means the "390x" or whatever it'll be called will be a powerhouse.

if it really is hbm+massive chip+watercooling it should.

I think she was referring more towards x86 chips (the ones that compete with Intel), but I could be wrong. Wish I could get the full transcript of what she said because the only direct quote from the entire article was...

"We have reduced our low-end PC exposure. When you look at AMD's historical business, we were very, very heavily concentrated in consumer, low end PCs, that was actually our speciality. However, when you look at that market, there has been so much volatility, especially at the intersection between tablets and PCs and differentiation hasn't been there... very clearly, we are an x86 company. We have tremendous x86 heritage, and opportunity to lead in that area. We are absolutely going to invest in high-performance x86."

But honestly, I dont doubt the 390x will be a powerhouse. Curious on what NVIDIA will reveal in response, and if it will be sufficient.

 

[LTC8K6]

I guess (and hope) this means the "390x" or whatever it'll be called will be a powerhouse.

if it really is hbm+massive chip+watercooling it should.

If HBM is currently limited to 4Gb, as we have read, then it can't be a powerhouse yet.

 

[LTC8K6]

I think AMD's best place with CPUs is "value for your money".

 

[ShintaiDK]

Sounds like Lisa Su realises that x86 is where you can make decent margins on CPU's.

I suspect this is the beginning of the softening up process that ends with the announcement of the defunding/cancellation of K12.

Yep. Their sudden ARM adventure is just another faceplam.

 

[richaron]

That is using flawed logic, crazy deductions, and is honestly somewhat insulting. Fact is, AMD IS the cheaper solution NOW. That is why they ARE seen as the cheaper solution by anyone living in 2015, and that is also why Lisa Su wants to make it CLEAR to investors that she still has not given up on high margin products. Whether this is just AMD hyping up investors (like usual), or there are actual products in the pipeline to back up her wishes, only time will tell.

This is very narrow minded, and just plain wrong.

Its not false logic to respect the advantages of any product. And it's not false logic to respect AMD as a brand more than the "cheaper solution". Plus simple maths makes the whole generalisation sound stupid; is a 290X cheaper than a 750?

Those whom classify AMD as the "cheaper solution" are: 1) only looking at the ultra high end (fair enough I suppose). Or 2) refuse to acknowledge the price/performance metric with regards to all uses.

 

[Arachnotronic]

I think AMD's best place with CPUs is "value for your money".

That's not what AMD wants to be known as

so much for the popular idea that AMD will be selling $1000 Core i7 Extreme performance for $300, eh?

 

[Flapdrol1337]

I think she was referring more towards x86 chips (the ones that compete with Intel), but I could be wrong. Wish I could get the full transcript of what she said because the only direct quote from the entire article was...

"We have reduced our low-end PC exposure. When you look at AMD's historical business, we were very, very heavily concentrated in consumer, low end PCs, that was actually our speciality. However, when you look at that market, there has been so much volatility, especially at the intersection between tablets and PCs and differentiation hasn't been there... very clearly, we are an x86 company. We have tremendous x86 heritage, and opportunity to lead in that area. We are absolutely going to invest in high-performance x86."

But honestly, I dont doubt the 390x will be a powerhouse. Curious on what NVIDIA will reveal in response, and if it will be sufficient.

Hm, yeah, in the article it really is about x86.

In that case, doesn't really seem like a realistic goal. I mean, intel is selling chips half the size for twice the price and even wastes a bunch of that die on igp. Amd and their fab partners would really have to make a big step.

 

[frozentundra123456]

Yea, I said this in another thread, but this strategy is a 180 degree turn from their previous emphasis on SOC, custom designs, ARM, microservers, igp/hsa performance(maybe that is coming in 2017), and not competing head to head with intel. It is a gutsy move for sure. Whether they can pull it off is another question. They are basically abandoning the entire PC market to intel for the next 18 months to 2 years except for servers and HEDT with no igp. I am actually glad to see them get back to their x86 roots, but it is a very, very risky strategy.

 

[mikeymikec]

nvm

 

[blastingcap]

However it seems that AMD has had enough and wants to stop being known as the “cheaper solution” in the eyes of the public and wants to be known for its high-end and high-performance chipsets instead. According to the company’s CEO Lisa Su, how they will achieve this is through a high-investment in the x86 field.

Sounds like a recipe for a headache, bashing your head against the wall over and over again. It's not like Intel and NV are going to stop investing R&D for a few years while AMD tries to catch up.

 

[LTC8K6]

That's not what AMD wants to be known as

so much for the popular idea that AMD will be selling $1000 Core i7 Extreme performance for $300, eh?

Then Zen needs to arrive soon, and it needs to be competitive with what Intel has currently, not with what Intel had 2 years ago.

If Zen is merely adequate, then it will just cement AMD's place in the CPU world.

As I said earlier, I would love to see AMD try to push Intel, even though I am an Intel fan.

 

[frozentundra123456]

This is very narrow minded, and just plain wrong.

Its not false logic to respect the advantages of any product. And it's not false logic to respect AMD as a brand more than the "cheaper solution". Plus simple maths makes the whole generalisation sound stupid; is a 290X cheaper than a 750?

Those whom classify AMD as the "cheaper solution" are: 1) only looking at the ultra high end (fair enough I suppose). Or 2) refuse to acknowledge the price/performance metric with regards to all uses.

I dont really understand your reasoning here.

What card does 290x compete with? Maybe 970 or 980? Which one is cheaper? What chip does (or is supposed to) the FX8xxx compete with? i5 or maybe even i7? again, which is cheaper? Does AMD have any gpus that sell for 600 dollars plus like Titan and GTX 780Ti, do they have any 300 dollar plus cpus like intel's i7 and x99 lineup, not to mention even higher margin servers?

Point is, in the comparable segments, AMD is the "cheaper" solution. Obviously if you compare a near top end 290x with a 750Ti, the low end card will be cheaper. Only in the very low end cpu segment are AMD and Intel in similar price ranges, and there is not much profit there.

And the relatively good "price to performance" that you mention, is exactly what Su wants to stop doing. Selling a bigger die for less money is one reason AMD continually hovers around zero profit year after year.

And yes, I agree with Arachnotronic that *if* zen is the powerhouse cpu that AMD fans hope for, it will be priced much higher than current AMD processors, as it should be.

 

[jpiniero]

And I want a pony. This totally reeks of "we have no money, what's the easiest/fastest path to bringing out something new and delay everything else".

AMD still doesn't seem to understand is that if they want to actually make enough money to stave off the bond holders they need to invade Intel's corporate lines but FX Zen is about the exact opposite. A large chunk of Skylake desktop sales are going to be 35 W parts, yet is still extremely powerful AND has an IGP. The strategy they are on might have worked in 2010, but not now.

 

[NTMBK]

I think AMD will stop developing custom ARM cores past K12. They will probably integrate off-the-shelf ARM cores into SoCs that absolutely demand ARM, but even then they'll find the market for that is probably not pursuing for them.

My guess is it depends on how much extra it costs to make K12 & Zen, instead of just Zen. If K12 really just is "an ARM version" of their x86 core, then it could still turn out to be profitable. If it's significantly different and cost just as much to develop as Zen alone did, it probably won't be long for this world.

 

[JDG1980]

I'm trying to think through how the execution of this strategy will work.

Let's take an optimistic, but still reasonable, guess at how Zen will perform. Suppose that their top FX SKU is an 8-core (16-thread) model, with IPC on par with Sandy Bridge, and a base clock of 3.5 GHz. Assume a TDP of 125W. Such a chip would be pitched against hex-core Broadwell-E (assuming Skylake-E isn't out by that time). In terms of performance, it would beat six Broadwell cores in multi-threaded loads. In single-threaded and lightly-threaded loads, it would fall behind, but still provide respectable modern-level performance.

How much could AMD sell this for? Well, the Intel hex-cores are around $500-$600. So AMD would probably have to go to $399. That's still much better profit margins than what they're making now with ancient Piledriver junk, but it's not going to match Intel's >60% gross.

I don't know enough about the server market to comment on it. But Zen as described surely looks like it could make some inroads there. I wonder if a competitor to Xeon D is feasible.