Question x86 license value quickly dropping

[carancho]

With Qualcomm's entry to the client market, and the threat of other competitors joining, like MediaTek and even possible nVidia, the ability of AMD and Intel to capture rents from their x86 exclusivity must be quickly dropping. It has been happening for a while on the server market, with everyone building their own ARM chips. Fewer rents means less resources for R&D. Plus, all ARM license holders contribute to the development of the ISA and the standard core designs through their royalty payments. With a far larger volume of sales, it's not unlikely that ARM can outspend x86 on design R&D. It's even likely that in the future chip vendors collaborate as tightly upstream as it currently happens in the browser market, with everyone settling on Chromium.

How do Intel and AMD survive as x86 chip makers in this context? Long-term trends look very unfavorable to them.

 

[Eug]

Do you have any hard data? Links would help.

 

[carancho]

I haven't seen a breakdown of server market revenues that includes all logic chip vendors. (nVidia ate up a very large share of server expenditure, but I haven't found one that includes all ARM and TPU chips.)

And on client, other than Apple, it is just beginning. Yet, you see the strength of the WoA lineups announced today (6 laptop makers with several models each, all available to order on day one), and it's hard to miss where this is going. On client now you have 5+ suppliers (Apple, AMD, Intel, Qualcomm, plus chinese client ARM CPU vendors replacing Intel starting this year) with huge economies of scale plus the threat of at least two more large and well capitalized entrants, MediaTek and nVidia. I don't see how you sustain a large x86 license exclusivity value in this context.

 

[gdansk]

Why make CPUs at all? There is more money in accelerators.

 

[Doug S]

I haven't seen a breakdown of server market revenues that includes all logic chip vendors. (nVidia ate up a very large share of server expenditure, but I haven't found one that includes all ARM and TPU chips.)

And on client, other than Apple, it is just beginning. Yet, you see the strength of the WoA lineups announced today (6 laptop makers with several models each, all available to order on day one), and it's hard to miss where this is going. On client now you have 5+ suppliers (Apple, AMD, Intel, Qualcomm, plus chinese client ARM CPU vendors replacing Intel starting this year) with huge economies of scale plus the threat of at least two more large and well capitalized entrants, MediaTek and nVidia. I don't see how you sustain a large x86 license exclusivity value in this context.

Maybe wait to see if there is meaningful market share for Windows/ARM before pronouncing x86 doomed. I'm not dismissing your conclusion, just saying it is quite premature. If all those ARM offerings are doing is matching what x86 can do, what's the reason for consumers to switch?

Qualcomm is not known for competing aggressively on price (and that's being charitable) so they aren't pricing their stuff cheaper to any degree than the equivalent x86. If Nvidia does their own ARM, or AMD does, neither of them have incentive for fire sale pricing to push out x86. AMD for obvious reasons, and Nvidia simply because they don't care whether the PC market is x86 or ARM. Heck, they don't really care that much about the PC market at all anymore, their future (along with 90% of their market cap) is wrapped up in datacenters now.

 

[SpudLobby]

Maybe wait to see if there is meaningful market share for Windows/ARM before pronouncing x86 doomed. I'm not dismissing your conclusion, just saying it is quite premature. If all those ARM offerings are doing is matching what x86 can do, what's the reason for consumers to switch?

Qualcomm is not known for competing aggressively on price (and that's being charitable) so they aren't pricing their stuff cheaper to any degree than the equivalent x86. If Nvidia does their own ARM, or AMD does, neither of them have incentive for fire sale pricing to push out x86. AMD for obvious reasons, and Nvidia simply because they don't care whether the PC market is x86 or ARM.

Was fine until this part:

Heck, they don't really care that much about the PC market at all anymore, their future (along with 90% of their market cap) is wrapped up in datacenters now.

They do care actually because Nvidia cares about the future of AI and part of how they got to where they are is mindshare and influence. Do you know any AI researchers in academia? It matters. You can amortize costs too. That’s why they do auto as well.

There’s a Nvidia part on Intel 3 coming, and possibly a MediaTek/Nvidia collab part coming.

But otherwise agree.

 

[Tup3x]

Two ships vs. armada. I think it's pretty obvious how things are going in the future. X86 has been Intel's strength because they've had the PC monopoly. Take that away combined with mediocre chips... Things can change rather quickly.

 

[itsmydamnation]

Two ships vs. armada. I think it's pretty obvious how things are going in the future. X86 has been Intel's strength because they've had the PC monopoly. Take that away combined with mediocre chips... Things can change rather quickly.

It's not an armada, it's like stock arm cores and Qualcomm. So I count two vs two.

 

[Tup3x]

It's not an armada, it's like stock arm cores and Qualcomm. So I count two vs two.

That it irrelevant. If different manufacturers flood the market with ARM PCs that's all that matters.

 

[soresu]

That it irrelevant. If different manufacturers flood the market with ARM PCs that's all that matters.

But those different manufacturers are all using the R&D IP of either ARM Ltd or QC (or Apple is you count Macs too).

If you want to bring OEMs into the mix then the x86 has no shortage of them at the moment, and will continue to do so long after ARM Ltd or QC solutions prove superior.

Just remember that Intel has a long history of mindshare in their favor - it's not easy to go against that even if you have a superior product.

 

[moinmoin]

AMD is pretty flexible. So should they ever want to move to ARM and push those products more than their x86 products you'll know that x86 is losing. But up to that day AMD obviously sees competing in the x86 market as more profitable than competing in the ARM market which says it all.

 

[Tup3x]

But those different manufacturers are all using the R&D IP of either ARM Ltd or QC (or Apple is you count Macs too).

If you want to bring OEMs into the mix then the x86 has no shortage of them at the moment, and will continue to do so long after ARM Ltd or QC solutions prove superior.

Just remember that Intel has a long history of mindshare in their favor - it's not easy to go against that even if you have a superior product.

We'll have to wait and see... PC business is operating up now that Windows is working on ARM machines and Qualcomm's exclusivity is ending. Anything is possible.

 

[jpiniero]

WoA is dumb. This is just an extension of AI hype.

 

[DisEnchantment]

Arm on Windows or anything on Windows has little to do with any CPU ISA. It has everything to do with Microsoft's effort to stay relevant and keep market share.
15 years ago I was working with Windows (WinCE) on Renesas SH4. And Windows Mobile was running on multiple other Architectures as well.

While Windows has a lot to blame itself for the bad power efficiency, lack of competency to design high efficiency SoCs by AMD/Intel contribute to the loss of market share of Windows to some extent in the laptop space.
If I were Microsoft, I would not bet the future of Windows on the two x86 vendors, I would want some options

 

[soresu]

WoA is dumb. This is just an extension of AI hype.

AI hype is just a new wrinkle they are adding to it.

I think they started with WinRT even before Apple declared their ARM Mac plans, with WoA pretty much a partway reengineering, partway response to ARM Mac plans.

 

[LightningZ71]

Just keep in mind that the core of the PC/Laptop market is moving largely to cloud based solutions. Client side compute is rapidly diminishing in importance for everything but games, academia, and certain niche professional applications. In other words, almost everything is moving to some sort of web based app with the local computer responsible for running the browser and handling any client side compute loads that it generates.

This means that, largely, it doesn't matter what flavor of hardware is running on the client device. It only matters how well it's drivers are implemented and how capable those resources are. It can be ARM, x86, or even PowerPC, MIPS, VAX, Itanium. It doesn't matter so long as the drivers and libraries are properly written and the hardware is performant enough. This is a consequence of the "software rental"/SaaS model that the entire industry is moving to.

 

[carancho]

Just to clear this up: x86 can lose its pricing power / license "monopoly" rents with small changes in volume shares. It can even lose pricing power with just the threat of competition, which now is real. So I'm not saying that x86 sales are soon going to zero, not that Intel/AMD are going out of business. I'm saying that x86 products should see smaller margins, all else equal, due to lower prices and higher R&D costs.

 

[carancho]

Just keep in mind that the core of the PC/Laptop market is moving largely to cloud based solutions. Client side compute is rapidly diminishing in importance for everything but games, academia, and certain niche professional applications. In other words, almost everything is moving to some sort of web based app with the local computer responsible for running the browser and handling any client side compute loads that it generates.

This means that, largely, it doesn't matter what flavor of hardware is running on the client device. It only matters how well it's drivers are implemented and how capable those resources are. It can be ARM, x86, or even PowerPC, MIPS, VAX, Itanium. It doesn't matter so long as the drivers and libraries are properly written and the hardware is performant enough. This is a consequence of the "software rental"/SaaS model that the entire industry is moving to.

We'll see what's the overhead of WoA, but if it's similar to Apple's the performance hit will be equivalent to just a couple of months worth of CPU performance increases. So it doesn't really matter in a broad market sense (unless the implementation is truly horrible).

 

[SpudLobby]

Just to clear this up: x86 can lose its pricing power / license "monopoly" rents with small changes in volume shares. It can even lose pricing power with just the threat of competition, which now is real. So I'm not saying that x86 sales are soon going to zero, not that Intel/AMD are going out of business. I'm saying that x86 products should see smaller margins, all else equal, due to lower prices and higher R&D costs.

Yeah, agreed. Marketshare or profits, all else equal, will come down for Intel especially.

Arm on Windows or anything on Windows has little to do with any CPU ISA. It has everything to do with Microsoft's effort to stay relevant and keep market share.
15 years ago I was working with Windows (WinCE) on Renesas SH4. And Windows Mobile was running on multiple other Architectures as well.

While Windows has a lot to blame itself for the bad power efficiency, lack of competency to design high efficiency SoCs by AMD/Intel contribute to the loss of market share of Windows to some extent in the laptop space.
If I were Microsoft, I would not bet the future of Windows on the two x86 vendors, I would want some options

This is exactly why they’re doing what they’re doing, yep.

But to be clear, I think they fully understand this isn’t really about ISA on an intrinsic technical level, but that wasn’t the OP’s point or anyone else’s. This comes up a lot, and most of the time at this point when people bring up the ISAs (in these places) they’re not talking about the technical proficiencies but the business models and the players using them, which are only incidentally lined up by competency/incompetency in designing efficient SoCs.

 

[Thunder 57]

Just to clear this up: x86 can lose its pricing power / license "monopoly" rents with small changes in volume shares. It can even lose pricing power with just the threat of competition, which now is real. So I'm not saying that x86 sales are soon going to zero, not that Intel/AMD are going out of business. I'm saying that x86 products should see smaller margins, all else equal, due to lower prices and higher R&D costs.

Nah, there is far too much inertia behind x86 for it to "soon go to zero". Also, money isn't always predictive of how good a product becomes. AMD with a shoestring budget launched Zen against the behemoth that is Intel and has done quite well.

 

[itsmydamnation]

We have been hearing this story since a57, nothing has changed the outlay to take on amd and Intel is huge. In direct competition the only real success story is Amazon and thats vertical integration more then anything else.

Amd and Intel aren't making the RISC vendor mistakes of the 90 and early 00.

The armada of dead custom arm cores should be a warning that it's not that easy.

 

[kschendel]

Why make CPUs at all? There is more money in accelerators.

Well, ya'know, there's zero money in accelerators without CPU's. A little bit better defined than chicken and egg.

 

[gdansk]

Well, ya'know, there's zero money in accelerators without CPU's. A little bit better defined than chicken and egg.

CPU is soon a commodity. License ARM cores and glue them together. Send to TSMC like everyone else. The barrier of entry is lower than ever. Not much room for margin in the long run unless you're vertically integrated like Nvidia, Apple or AWS. And in all those cases they're simply cutting out someone else's margin.

 

[adroc_thurston]

CPU is soon a commodity.

no.

License ARM cores and glue them together

them aren't good.

The barrier of entry is lower than ever

ARM heavily subsidizing IP design efforts doesn't mean the barrier to entry is low.
Either way, mid IP.

Not much room for margin in the long run unless you're vertically integrated like Nvidia, Apple or AWS. And in all those cases they're simply cutting out someone else's margin.

did you really say that a few months before turin-d trvthnuke drop?

 

[poke01]

honestly, it all depends on how good that Cortex X5 core is. If it’s good as rumoured at yeah.

With others entering the PC laptop market like Nvidia. All depends on the X5 core