It's different this time...What's different?
(AMD's management doesn't suck.)
I thought since Niceguy767 was gone I would throw restraint to the wind and try to take up some of the slack and post some bullish commentary, here goes :)
Each time AMD gains and inch there are those who hope that this time it will be different. I hate to stick my neck out but I think that this time it just may be. I am not just blindly hoping, I have reasons why I think this. For those who are interested my reasons follow:
AMD started out as a legitimate second sourcer to Intel. They copied Intel designs with Intel's blessing even to the point of being sent mask sets directly from Intel. Intel did this because they needed a second source in order to be considered a credible supplier, many companies required the sources of their components to have a second source. Then with the 386 Intel decided to drop AMD as a second source and this was the equivalent of cutting off AMD's legs. This ushered in a grey area period where AMD struggled to define it's future and this grey area resulted in a long and drawn out lawsuit over intellectual property that only ended in the mid 90's. AMD then not only had to go it alone but they had to keep afloat and catch up with Intel technologically, they had a clearly inferior core in K5 and K6 (in FP performance and MHz rampability), but even with these disadvantages and others they still managed to continue to develop and extend the Socket7/Super7 platform and specification so that they no longer needed to be tied to Intels infrastructure and could maintain some level of self determination, rally developer and infrastructure support, maintain a competitive position in the low end, build a new state of the art Fab in a foreign country, and all the while continue research and development on a new processor core that would once and for all separate them from dependance on Intel's infrastructure (EV6 etc.) They had hiccups along the way, the transition from a second sourcer to an independent solution provider (processor core, chipsets etc) was not always smooth but they pulled it off.
And now AMD stands looking forward with:
-An unconditionally competitive product
-A broadening product portfolio to serve new market segments and by doing so significantly improve ASPs and margins.
-A state of the art copper fab that will serve their growing needs for capacity and in the meantime provide potential income from foundry or partner deals
-A completely independent infrastructure
-A broadening array of technological allies and partners
-A broadening patent and intellectual property portfolio
-A Flash partnership (FASL) in a booming flash market that no longer has to subsidize an unprofitable microprocessor segment and can now contribute it's revenues directly to profit.
-Improved Fab and process experience (gleaned from the hard lessons of the past)
-profitability!!
These are not things that AMD could claim to have had in the past when they were attempting to keep up with a competitor possessing virtually limitless resources, in the low end, using an inferior core, and no high end business to subsidize the low margins, while much of the while their technology was under dispute and they were embroiled in intellectual property lawsuits that drained them of much needed resources. As Atiq Raza said "Profits are a great deoderant", AMD hasn't had any deoderant in a long time, they have stunk and AMD's management gets a lot of knocks. but neither that, nor the snafus along the way detract from the fact that despite all of AMD's disadvantages each successive processor core brought them closer to their goal of establishing themselves, once and for all, as an independent powerhouse in the x86 supplier marketplace.
Given the fact that AMD has succeeded in catching up despite all of the disadvantages of the past is it unreasonable to believe that they can keep up now that most of those disadvantages have already, or are in the process of, evaporating. That is what is different this time. AMD is no longer disadvantaged, they have caught up and now must only keep up in the face of a much improved (and it seems continually improving) competitive situation. This is what keeps me heavily margined in AMD. They have fought against seemingly insurmountable odds and now those odds are improving, they have fought their way uphill and now the playing field is much more level, this is what has changed and this is why it just might truly be different this time.
Just my humble opinion.
Epinephrine |
