ARM vs Atom: Intel's Newest Challenge

The ARM architecture offers several advantages when compared to Atom.

ARM has smaller die sizes than the Atom processors which gives ARM a cost advantage. Having been designed for use in space sensitive environments, the ARM core is smaller than the Atom equivalent. This is the case even though Atom is being manufactured on a more advanced process than most of the current ARM designs.

In addition, ARM is more highly integrated than Atom. Almost all ARM products for use in the mobile space are single chip SOC solutions. This offers a substantial size advantage over the current Atom solution which requires three chips and the upcoming solution (Moorestown) that is still a two chip solution. Atom won't offer a single chip solution prior to the advent of Medfield sometime in 2011. So Atom won't be able to match ARM for solution size or integration until somewhere between 1 and 2 years from now.

But the biggest advantage ARM holds right now is in power efficiency. Qualcom's Snapdragon processor is the poster child for ARMs high performance processors, so I'll use that as a reference point. The Snapdragon processor is reported to use 250-500mW under load at 10mW at idle. Atom's Moorestown, due out later this year, should use ~1000-750mW under load and ~35mW at idle. So ARM offers about a 2-3X power efficiency advantage over the Atom platform.

With all these disadvantages, one wonders what Atom can bring to the table.

First and foremost is sheer processing power. If you look at Intel's marketing around the LG GW990 from CES, you will see an emphasis on multi-tasking. ARM is closing the gap on responsiveness on single apps, but the x86 architecture that Atom is based on still seems to have more horsepower and allows you to do more things at once.

Another big advantage that Atom currently enjoys is the ability to run flash applications. However, Adobe is reportedly working with ARM to enable their processor designs to run flash applications. So this advantage is going to be short lived. It has helped Atom become the dominant netbook processor but it will not continue to drive future growth.

The last advantage that the Atom brings to the table is the ability to run Windows. By being able to run Windows, Atom brings a large software infrastructure to the table for any device it is installed on. But this advantage isn’t quite as big as it might seem at first glance.

The Atom processor was designed to be a “good enough” processor for basic PC tasks like browsing the internet, viewing video, etc. But it lacks the power to run large applications well. So while Atom may be capable of running x86 applications, the experience with many of them is poor. If the software doesn’t run well it is not much better than not running at all.

The use of Atom in small form factors further offsets the advantage of using existing software. Many of the current applications don’t fit these small form factors very well. This can be fixed, but requires that the code be modified to correct the problem. Having to modify the code for this purpose nullifies much of the advantage of being able to use the existing software.

Intel’s marketing along the software lines seems to have matured beyond the idea of basic software compatibility of late. They are placing a greater emphasis on cross platform portability. I believe that this is a more realistic assessment of the x86 advantage than focusing on the software because it focuses on one of the few real weaknesses of the ARM architecture.

ARM doesn’t manufacture chips, it sells licenses to use its architecture. Each licensee is free to modify the basic design to suit the licensee’s needs. This results in an ecosystem where the various implementations from different vendors may not be compatible with each other even though they are based on the same core architecture.

Systems built around the x86 architecture bring the guarantee of cross system compatibility. Not in the sense that you can move the software directly, but rather in the ability to link the systems together and transfer data between them. So by choosing Atom, you know you are choosing a device that will work and play well with your other devices.

In summary, ARM and Atom are rapidly converging to similar levels of computing power and energy efficiency. Within a few years I believe there will only be one key differentiator between the two architectures. The differentiator will be the ease with which you can move data between your various computing applications.

Due to the homogenous nature of the hardware infrastructure Intel is building I believe this gives them a substantial advantage. However, there is still a need for urgency on Intel’s part. If ARM becomes the entrenched incumbent architecture in this new space, it will take far longer for Intel to move Atom down into the smaller devices. I believe the x86 architecture, warts and all, will become the dominant architecture in personal computing devices. But if Intel doesn’t move quickly enough they will miss the initial growth curve and the resulting profits that come from riding that curve.

Edit: Cleaned up the spacing

Intel and AMD bury the hatchet in Anti-Trust case for $1.25B

After decades of market wrangling and years of legal complaints, AMD and Intel have settled on their long standing dispute of Intel's alleged anti-competitive practices against AMD. In accordance with the settlement, all patent disputes are resolved and AMD will withdraw all legal complaints worldwide. In addition to this, the cross-license agreement has been extended for another 5 years. In the aftermath of this historic settlement between the two largest chip-makers, there will likely be many who cry foul or vindication and the flames on forum's will reach far and wide.

We don't know the exact reason's why Intel settled now, or what the long term ramifications will be for either company, but suffice it to say, this long and storied chapter is now closed. AMD may have come away with a victory, but what about consumers and OEM's, did they gain anything from this? How about the semi-conductor industry?

The legal battles and anti-trust complaints stem from the notion that Intel is a "monopoly" and has used its position to push AMD out of the market and in the process hurt AMD and consumers. The specific complaints are against the use of discounts or rebates that Intel would pay to OEM's if they agreed to use Intel chips exclusively or at some percentage of volume. The logic goes, that Intel was able to use a dominant position and essentially "pay" companies not to use AMD chips. This is claimed to not only directly hurt AMD, but the entire market. As a result, OEM's and consumer's now have "less choice" and this will ultimately result in less competition.

Not only is this analysis short-sighted, it is missing the bigger picture of the market as a whole and will ultimately result in hurting the semi-conductor market and consumers. Despite the fact that AMD actually sold everything it made during the time Intel was allegedly committing anti-competitive behavior, there is very little evidence that consumers were ever unable to buy AMD chips. The fact that Intel was able to offer rebates and discounts to OEM's and remain incredibly profitable only speak to the efficiencies of Intel's capital structure which resulted in lower prices for OEM's and consumer's. The fact that AMD was unable to offer discounts and under bid Intel for business shows that the problem is not with Intel being Anti-competitive, but AMD being uncompetitive in the market. AMD was unable to undercut Intel's prices because they had a less efficient capital structure and were unable to profitably sell chips at those level's. In a free market, the incentive is for AMD to improve efficiencies and eliminate waste such that they can compete.

Next, Is Intel really a monopoly? It is important that we distinguish between a legal monopoly and an economic monopoly. A legal monopoly is one that is granted by the state which allows a company to be a single supplier of a good at the expense of all others (i.e. utility companies etc.). An economic monopoly occurs when a company emerges as a single source supplier by being the most efficient (poorly run companies went bankrupt) or consumer preference chose a single entity in the market. Is Intel a legal monopoly? Yes and No. The patent system is a de facto monopoly system where a company is granted a legal monopoly over an idea. Intel is technically a legal monopoly on the x86 IP and other things like chipset busses and other misc items. When Nvidia complains about Intel refusing to grant them a bus license for QPI, the argument for anti-competitive behavior has some merit. However, in the case of Intel vs AMD, the government has brokered a cross-licensing agreement for all IP and they are essentially in a quasi-free market situation. So in this respect, Intel is NOT a legal monopoly. However, Intel is arguably an economic monopoly which is why the government steps in.

Ironically, The government has very little problem with anti-competitive behavior when Intel prevents Nvidia from creating Nehalem chipsets because they were complicit in the arrangement of the monopoly and license. However, it appears they do have a problem with Intel becoming an economic monopoly because that was chosen by the market, ergo, the government didn't have any control in the situation, and therefore, must punish everyone involved.

Finally, the least realized aspect of harm is the fact that billions of dollars in capital have essentially been flushed down the toilet. How you may ask? Through a combination of fines from the EU and this settlement, over $2.5B in capital have been moved from wealth generating activities to wealth destroying activities. In a free market that is removed from coercion and government intervention, a profit occurs when you create a product that is worth more than the sum of all resources put into creating it. When this occurs, your reward for using resources effectively is a profit. On the other hand, when you are wasteful and inefficient and create a product that is worth less than the sum of all resources put into it, your punishment is a loss. In this respect, we have moved over $2.5B from one of the largest wealth generating companies in the world and blown it on boondoggles and social programs in the EU and given a handout to AMD which is nothing more than corporate welfare for a company that has a record of destroying wealth to the tune of ($7.2B) in retained earnings over the course of its lifetime.

To sum this post up, has the market benefited from the anti-trust activities against Intel. Most likely not, although AMD could surpise us with a remarkable turn around, but unfortunately that is still speculation. On the other hand, what we do know is that Intel has suffered much harm in all of this at the hand of the legal system so as of now, we can only say that a net harm has occured in the market and it's unknown how that will affect consumer's in the future.

"At heart, we're a reverse engineering design company" - AMD

"Advanced Micro Devices Inc closed a deal to spin off its manufacturing operations on Monday, and said it expects the new company to assume responsibility for paying off about $1.1 billion of debt.
The plants which make AMD's chips are now part of a $5 billion joint venture with Advanced Technology Investment Co, of Abu Dhabi, temporarily called The Foundry Co." - Reuters

In a very creative way, AMD has ridden itself of its crippling debt and the massive burden of capital investment going forward. While AMD may sound as if this strategic move brings them closer to their core expertise, it is without a doubt that this back-to-the-corner decision was the only way for AMD to remain viable. This new lease allows AMD, maybe for a few more product lifecycles to continue and remain as the only challenger to Intel.

At the bleeding edge of semiconductor technology, it has yet to be seen whether a fabless company can challenge one with a foundry. In the not so bleeding edge such as memory products companies with their own foundry like Samsung are dominating over the rest of the industry but competition remains vibrant. But in the x86 space where process leadership creates cost and performance advantages, history isn't kind to fabless companies. Starting this week, AMD is effectively what Transmeta was back in 2000. The difference is Transmeta had a lot of hype going for them and probably with a more compelling product offering in the mobile space.

Another wider-than-expected loss for AMD

SAN FRANCISCO (Reuters) - PC chipmaker Advanced Micro Devices (AMD.N) posted a wider-than-expected loss in the fourth quarter as worldwide demand for PCs continued to shrink.
AMD reported on Thursday a net loss of $1.42 billion, or $2.34 a share for the quarter ending December 27, compared with a loss of $1.77 billion, or $3.06 a share, a year ago. Excluding certain items, the company posted a loss of 69 cents a share. Analysts, on average, had expected a loss of 56 cents a share, according to Reuters Estimates.
Revenue for the second-largest maker of central processing units for personal computers fell 33 percent to $1.16 billion, compared to analysts' estimates of $1.19 billion, according to Reuters Estimates. AMD said it expected revenue in the first quarter to decrease from the fourth quarter.

If AMD never made money during the best market condition, what hope is there when the economy is at its worst. For the first time the talk of bankruptcy for this company can never be more serious. Looking at the bright side of things, the Zoners could finally get a life.

Wait no more

If some of you have some spare money by the end of this month to buy a new computer and have been waiting for some comparison between AMD's 45nm Shanghai against Intel's new Nehalem, well wait no more: Link (Thanks to Axel).

The good news is that PhenomII has shown significant improvement over Phenom. But then this shouldn't be a surprise considering Phenom was a step back from Athlon64. Two years and a process node later, AMD finally defeats Intel's Q6600. If some call this as AMD being back in the game, so be it. All I wish is for some of our friends to return and have something to say. Their silence is deafening.

New Desktop

After years of being mobile, I finally decided to get myself a cheap but capable desktop from a custom build site. The system is intended to become a home file server, video editing and casual gaming. The specs follows:

MOTHERBOARD: GigaByte GA-EP45T-DS3R Intel P45 Express CrossFireX Chipset LGA775 FSB1600 DDR3/1600 Mainboard w/GbLAN,USB2.0,IEEE1394a,&7.1Audio
CPU: Intel® Core™ 2 Quad Q8200 @ 2.33GHz 1333FSB 4MB L2 **Overclockable S&S*** Cache 64-bit (Read the reviews and I am already hating this CPU)
MEMORY: 4GB PC12800 DDR3/1600mhz Dual Channel Memory (G.SKILL NQ Series w/Heat Spreader ***Overclockable XXX***)
VIDEO: ATI Radeon HD 4870 PCI-E x16 1GB DDR5 Video Card
OPT DRIVE: SONY DUAL FORMAT 20X DVD±R/±RW + CD-R/RW DRIVE DUAL LAYER
HDD: 1TB SATA-II 3.0Gb/s 32M Cache 7200RPM Hard Drive (I know i should get 2 HDDs each for OS and Data)
Total < $1000

OS: Vista Ultimate (i get free SW from MS)
DISPLAY: Dell 22" 1900x1080p S2209W ($236 from Dell)

The Intel Core i7 platform at the moment is quite expensive and it was one of the main reason why I chose the lamest of all the 45nm Quad core. The CPU / Motherboard will be the next upgrade path I take in a couple of years and choosing one at the bottom of the table should hasten the transition. And since it is the video card that does most of the work these days I had to go with AMD's 4870 - best value for money if you ask me.

Feel free to criticize and show how one can do better without breaking the bank.

AMD Bankcrupt in 2009

Despite an improving economy, large-scale capital spending projects continue to be delayed in favor of maintenance spending. Technology shares continue to lag badly, and Advanced Micro Devices files bankruptcy. - Doug Kass, "20 Surprises for 2009".

"AMD ends 2008 (until we see fourth-quarter results) with $1.3 billion in cash, four times that amount in debt, and an operating loss of $1.9 billion over the last four quarters. Add to the mix an unprecedented slowdown in global economic demand and AMD's own tenuous market share in servers and PCs, and it becomes increasingly difficult to see the company's failure as an outlying event". - Michael Goodman, The Street.

2008 was supposed to be the year AMD's went bankrupt but was averted by a unique financial agreement with an entity that was enjoying record oil revenues. But the realities on the ground are changing and rapidly getting worse. While Intel continues to spend on 32nm, AMD on the other hand will look at someone else to make the several billion dollar gamble. The bet includes the following: a) that market demand is there to recover the investment, b) AMD will have viable products and c) AMD is still around (with an x86-license) to design chips. Terrible odds if you ask me.