more on On AMD, Apple, Intel, IBM and The Great Game of Chips

[David Farber <dave () farber net>]

Begin forwarded message:

From: Koranteng Ofosu-Amaah <amaah () comcast net>
Date: June 6, 2005 2:32:40 PM EDT
To: dave () farber net
Cc: Newmedia () aol com
Subject: Re: [IP] more on On AMD, Apple, Intel, IBM and The Great  
Game of Chips



Mark Stahlman corrected me

> 1) AMD does *not* have its Dresden Fab 36 humming along and won't   
> until sometime next year.  As a result it is capacity constrained  
> and  cannot really do any damage to Intel at the moment.

I stand corrected but I guess that is in line with AMD's harrowing  
corporate history which I did allude to, and also to the time lag it  
takes for mistakes to be corrected or for capacity to come online in  
the chip world. In contrast in the web world, services can be  
deployed by the fleetest within 3 to 6 months. Execution in the  
hardware world is of more critical importance, you can't deploy  
busloads of consultants armed with duct tape to patch your dodgy chip.


> 2) When it come to high-performance memory and I/O capabilities,  
> the current sweepstakes  has IBM in first, AMD second and Intel in  
> a *distant* third.

As an Lotus/IBMer I should be gratified that you see things in such  
blue-tinted lenses and perhaps I too should pat myself on my software  
back. My assessment is that IBM has been happy to have premium  
pricing on the high end. That is fine as a strategy I suppose, but  
I'm interested in the ground level and the low end.

If I took a walk through Google or Yahoo server farms, I doubt I'd  
see many high-end Power, Itanium or even UltraSparc machines.

The Low End Theory [1] is the lesson of Mr Moore in the data center

http://www.ryanmcintyre.com/2005/03/mr_moore_in_the.html

or Jim Gray's Distributed Computing Economics
http://www.stanford.edu/~candea/teaching/cs444a-fall-2003/readings/ 
gray-economics.html



> 3) There is a fundamental battle going on between standard and  
> custom  parts... Where will the future volumes be?  Which markets  
> -- games, TVs, cellophones, cars, etc. -- will go  which way?

This is why I call it the The Great Game. It is like the current  
Scramble for Congo where everyone has heard about the untold riches,  
copper, gold, diamonds, coltan etc (the armies of 13 countries have  
been in that failed state searching for plunder over the past decade,  
and that's before the UN, and the French got on the ground). The  
Great Powers want to carve out some loot from their chips (silicon  
after all being sand). And speaking of coltan or tantalite that you'd  
find in your mobile phone, the cellphone must be the greatest mass  
market these days the equivalent of the personal computer.

e.g. within this past year, Nigeria installed 1 million cell phone  
lines. From zero to over a million in a year is stunning and perhaps  
emblematic of pent up demand for development. I don't know the  
numbers for India or China, but that is a sign of a mass-market,  
driving the kind of innovation we . On this list, there's a periodic  
argument about whether the US is falling behind Europe, Japan or the  
growling tigers. It is hard to say but certainly having spent this  
past weekend in London, I can testify to the ascendancy of the small  
form factor.

The problem for the chip makers is that the price point for the  
mobile chips that are being sold to emerging markets is actually  
quite low, and the concerns are about power consumption and battery  
life, things that like Detroit's focus on big Cadillacs and now SUVs  
might make one have to rejigger the strategy and rely on huge volume.  
On the desktop chip side, they'll be depending on the replacement  
cycle, my Y2K machine is getting a little long in the tooth, or the  
move to 64 bit or to dual core (like the hyperthreading buzzwords  
foreshadowed).



> Glad you like AMD -- so do I but there are still many fundamental   
> issues unresolved as we rapidly deploy the next-generation  
> platform  and prepare for global expansion in digital services.

What I like is not necessarily the company, indeed, my stockbroker  
seeing my play portfolio treats me like a dilettante.

What I like is the effect the competition is having on the  
fundamentals of the industry. The notion that Intel is aggressively  
courting all and sundry to not jump ship and is rushing out dual core  
parts and pricing them at a level that must be painful for their  
cautious CFOs. The notion that Microsoft will actually sit down and  
support AMD64 so that those RedHat ants from the village of Linux  
don't get too much of a head start tickles me. The notion that Apple  
can show a little leg and give everyone their collective titillation  
quotient at the beginning of the silly season. The notion that  
executives at IBM have been sweating for the past few weeks trying to  
stem the flow is great for me. In the trenches were I live, I deal  
the occasional insane mandates from on high, I like others to share  
my pain. Plus the users all benefit. I'm looking for a nice box for  
my grandma and I'm glad to have a little pricing power.

Sidenote, I found some beer and coca-cola coffins to go with the  
great bag of chips.

http://www.flickr.com/photos/koranteng/tags/coffins/

[1] for the musically inclined that The Low End Theory is the name of  
an album by A Tribe Called Quest (in the top 10 albums of the 1990s  
IMHO)

--
Koranteng
--
Koranteng's Toli: the blog edition
http://koranteng.blogspot.com/

"Just because a lizard nods its head doesn't mean it's happy."
- old Ghanaian proverb


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