Prize fight: chip maker AMD In a David and Goliath story, tiny chip maker AMD battles giant Intel for market share with a killer combination: better technology and lower prices.
Jun 5, 2006 Calvin Leung
http://www.canadianbusiness.com/technology-news/prize-fight-chip-maker-amd/ INTC Intel Corp. and its much smaller yet equally fierce rival, Advanced Micro Devices Inc., have a new place to rumble for microprocessor market share: inside Dell computers. For more than two decades, Intel has held the title of Dell's exclusive supplier of computer processor units (essentially, the digital brains of computers). But in May, the world's biggest PC maker revealed that it would begin offering AMD-made CPUs in its high-end servers before the end of the year. “In the wake of three difficult quarters, Dell has finally recognized that lacking AMD's more powerful Opteron server chips in its lineup was hurting its sales and its reputation,” said Punk, Ziegel & Co. analyst JoAnne Feeney in her May 19 research report.
DELL/EMC Kevin Rollins, president and CEO of Dell Inc., downplayed the decision in a televised interview. Smiling for the camera and seemingly praising Intel's products at every opportunity, he pointed out that high-end servers account for a small fraction of his company's business. Rollins repeatedly dodged questions on whether Dell plans to use AMD chips in more of its products, but industry watchers believe the stage is now set for AMD to battle its way into the PC maker's other servers, laptops and desktop computers. The stakes are high. According to Prudential Equity Group estimates, AMD could capture US$1 billion in annual sales by penetrating a quarter of Dell's products.
The Dell announcement comes at a time when AMD, based in Sunnyvale, Calif., appears to have the momentum in its fight with Santa Clara neighbour, Intel. Over the past three years, AMD has grabbed share from Intel–most noticeably in the server segment–and now holds a roughly 17% slice of the market. A big reason: AMD has hit Intel with a killer combination of better technology and lower prices. The prize: shares of AMD (NYSE: AMD) have more than quadrupled in value over that period.
Intel seems particularly vulnerable lately. Plagued by supply problems, it posted disappointing fourth-quarter results and strained relationships with key customers.
Its stock (Nasdaq: INTC) has steadily fallen 30% since the beginning of the year. Nevertheless, Intel remains the heavyweight champion of the microprocessor industry, with an estimated 80% market share. It boasts one of the most well-known brands in the world. Plus, the chip giant spends roughly fives times more on research and development than AMD. Can the underdog in this matchup rise to the challenge and win a bigger chunk of Dell's business from Intel?
AMD's team of talented chip engineers should give the company a fighting chance at such a prize. Faced with the problem of slowing growth, Dell is placing more focus on beating its competition on technology. The PC maker, based in Round Rock, Texas, will likely need to beef up on AMD chips to do that.
Nathan Brookwood, an analyst at the IT consulting firm Insight 64, says AMD's desktop computer and server chips run faster, use less power and generate less heat than Intel's competing products. According to Brookwood, those last two benchmarks have become increasingly more important to corporations. “Technology has gotten to the point where the electricity needed to run computer networks and cool them is now a bigger part of most companies' IT budgets than the actual cost of buying the systems,” he says. Brookwood does, however, give the performance edge in laptop microprocessors to Intel. Those chips, he explains, came out of Intel's Israeli design team, whose practices have since been adopted by the rest of the company.
AMD's technological advantage, however, may be short-lived. Analyst Feeney says Intel's new generation of chips–based on its new “core microarchitecture” and slated for release beginning in the third quarter–will “help Intel catch up to AMD's current offerings and surpass them in some cases.” Nevertheless, AMD plans to counter with its own new releases over the next year.
http://investorshub.advfn.com/ATI-Technologies-ATI-2627/ What's more, Brookwood believes AMD has built up its engineering expertise to the point where it will now trade chip performance leadership with Intel, much the way ATI Technologies Inc. (a recently rumoured AMD takeover target) and
NVDA NVIDIA Corp. http://investorshub.advfn.com/NVIDIA-Corp-NVDA-6290/ Nvidia Corp. swap technological advantages in the computer video card market. “Neither is going to leave the other in its dust,” Brookwood insists.NVDA NVIDIA Corp.
Even if AMD matches up evenly with Intel on general performance benchmarks, Brookwood offers another reason why Dell may need a wider range of AMD products: a company's overall chip design can't be everything to everyone. For example, Intel's microprocessors may be a hit with laptop users since they maximize battery life. But in a recent head-to-head contest in PC Gamer magazine, the AMD Athlon FX-60 “spanked” Intel's Pentium Extreme Edition 955 on several benchmarks, including “straight-up gaming performance.”
So if Dell is truly serious about offering the best technology on the market for all of its customers and at all times, it will likely need a wide range of both Intel and AMD products.
On the other hand, aggressive Intel pricing could prevent AMD from dealing any devastating blows to its rival's Dell business. Although the price gap has closed over the past few years, AMD products are generally cheaper than Intel's. But the chip giant recently dropped prices to grab back share from its scrappy rival. And a price war clearly favours Intel.
Last year, Intel boasted gross margins of 59.4% and profit margins of 22.3%, while AMD's figures were 40.9% and 2.8%, respectively. So Intel appears to have much more room to bring down its prices than AMD. If the two competitors dig in for a long bout, Intel's massive size will become an even bigger advantage. Intel's 2005 cash from operations came in at a whopping US$14.8 billion, which helped the chip giant plow US$5.8 billion into fixed assets and pay out US$2 billion in dividends. Over the same period, AMD churned out US$1.5 billion in cash from operations. That sum was US$30 million less than the company shelled out for fixed assets in 2005. In May, AMD announced plans to invest US$2.5 billion in a German chip factory over the next three years. So AMD seems to have many years of heavy investments ahead of it.
Nevertheless, AMD could suddenly snatch a much larger piece of Dell's business–if Intel's supply chain takes another misstep. Last year, the microprocessor mammoth underestimated the demand for its chip sets (components essential for a CPU to “talk” to other parts of the computer). So PC makers with Intel microprocessors couldn't build their computers. According to a September 2005 Needham research note, Dell and Lenovo were two computer companies affected by Intel's lack of inventory. Another PC manufacturer, Gateway Inc., was reportedly so frustrated with Intel's supply blunders that it substituted an AMD chip in its retail desktop computers during the fourth quarter of last year.
That said, AMD has had its share of problems delivering products to customers, too. In the past, Brookwood says, the company has essentially told PC makers “we've forgotten how to make that chip, so we can't get you any.” When AMD launched its Opteron server chip three years ago, some industry watchers were skeptical the company could deliver a high level of service. But since that product introduction, Brookwood says, AMD has been a predictable and reliable supplier. So the greatly improved chip maker could happily come to Dell's rescue if Intel's supply chain falters once again.
AMD has set its sights on an ambitious 30% share of the market, something the 37-year-old company has chased but never achieved. If the industry underdog can knock out more of Intel's chips from their slots inside Dell computers, that lofty goal seems within reach. Some PC makers may be hoping AMD gets a lot bigger. After all, a shift in the microprocessor market away from a monopoly and toward a duopoly should help to keep the pace of innovation high, product choices wide and prices low. So although the world's biggest PC maker may sing Intel's praises in public, it just might secretly be in AMD's corner.
Michael Robinson. I’m the Director of Venture Capital Investing and Technology Research here at Money Morning.
20 million Americans who suffer from minor nearsightedness, or macular degeneration, or glaucoma... Any form of vision impairment... And for the 1.3 million people in this country who are legally blind...
Facebook, Yahoo!, Tesla, Amazon, LinkedIn, and Netflix are pouring millions of investment dollars into Cognitive Sight. Silicon Valley insiders Elon Musk and Peter Thiel have led a $1 billion funding initiative.
Microsoft... $100 million. In fact, a team at Microsoft has declared that Cognitive Sight is: “Transforming Lives For the Blind Community.”
- Anirudh Koul & Saqib Shaikh, Microsoft And they’re not alone.
Chieko Asakawa is a research scientist at IBM. She’s also been blind since she was 14.
prototype of this Cognitive Sight technology
patents that are driving this Cognitive Sight revolution. 7,300 patents to be exact.
Forbes predicts Cognitive Sight will provide the “building blocks” of “the world of the future".
And the Financial Times reported Cognitive Sight is expected to unlock a nearly unprecedented wave of wealth creation.
established contracts with: Apple Intel Amazon Cisco HP Sony
biggest early backers of Cognitive Vision: IBM Microsoft Google
prototype of a technology called MEMS, or “microelectromechanical systems.”
These are the tiny sensors that our smartphones, smart cars, smart homes, any “smart technology” – all have embedded inside of them.
Vision is just a proxy for intelligence." - Tomaso Paggio, MIT Department of Brain and Cognitive Sciences In fact, MIT scientist Tomaso Paggio declared that vision is intelligence.
Cognitive Sight is the first technology that harnesses artificial intelligence to “see” the world more clearly than human eyes. Artificial intelligence – or A.I. – is one of the hottest fields in technology today.
Cognitive Sight is what Scientific American calls: “The Artificial Intelligence breakthrough we’ve been waiting for...” - Scientific American And devices like the one I’m wearing represent the first wearable A.I. technology set to be distributed on a massive scale.
The A.I.P. is the secret to Cognitive Sight. It’s what makes it possible for this device to use artificial intelligence to interpret all of the images being captured by the lens. It’s what makes it efficient enough to run all day, processing any kind of writing.
It’s what allows it to tell time, see colors, and identify faces of friends and family...
typical CPU consists of 8 to 10 cores... However, the A.I.P. can hold up to 15 billion microscopic transistors.
This A.I.P. is at least 3,200X more powerful than the CPU you most likely have in your computer right now.
These devices are able to do this with 10,000 license plates in the same time span it took the human eye to decipher just 36. That’s 278 times more powerful than the human eye!
Cognitive Sight device can solve this problem. During a study at NYU, Cognitive Sight technology was able to – with 94% accuracy – distinguish between folded up dollar bills, faded $5s, torn $10s and $20s.
Microsoft has reported the results of a stunning test that found Cognitive Sight can achieve an accuracy level of 99.83% when reading handwriting.
not just English. Also Chinese and Arabic.
How does this tiny device on the side of my glasses communicate everything to a person who can’t see? It’s really easy. It’s a process that revolutionized the hearing aid industry: bone conduction.
Bone Conduction technology is actually so quiet, one member of the Navy’s SEAL Team 6 called it a critical tool for coordinating the onsite raid that killed Osama bin Laden – an operation requiring the utmost discretion.
So when you are looking at this Cognitive Sight device, what you are seeing is the next major breakthrough in treating vision loss. And history has been pretty clear on this. A big breakthrough in vision equals a big windfall. Look at Ocata Therapeutic --------------------------------------------------------------- Staar Surgical created Visian ICL – the first foldable intraocular lens for cataract surgery. --------------------------------------------------------------------- Topcon Corp – they patented a special microscope for eye surgery.
--------------------------------------------------------------------- LCA Vision – they are one of the pioneers of laser eye surgery.
Wired magazine reported Cognitive Sight can unlock a “new kind of brain power.” Well, it can do even more than that. Cognitive Sight can also: “Become a prosthetic ‘memory support system’, bringing a new sense of independence to the cognitively impaired.” - George Vradenburg, Chairman of UsAgainstAlzheimer's The potential applications here are nearly limitless. Someone with dementia could slip a Cognitive Sight headset on and perform many of the daily tasks that were slowly becoming impossible to them.
If they are having trouble remembering where they are going – say, the corner store or post office – GPS in the headset could provide specific walking directions. ------------------------------------------------------------ “Backup Brain...” - CBS CBS has hailed this powerful application of Cognitive Sight as a “backup brain” for those suffering from failing memory. Helping people manage their Alzheimer’s and dementia is already a $170 billion a year industry.
let’s talk about how this miraculous technology could be used to help people with Parkinson’s disease... a condition that affects over 7 million people.
Parkinson’s disease also creates mental blind spots... And Cognitive Sight can fix them, too! One of these blind spots can create a very dangerous phenomenon known as “freezing.”
“Freezing” happens when the legs of a person suffering from Parkinson’s stop moving, but the upper body stays in motion. Oftentimes this can cause a person to fall. And it can lead to a severe injury.
Fortunately, Cognitive Sight devices could be developed with the ability to predict a freeze and help the person start moving again. A person with Parkinson’s would simply wear this marvelous technology. It has the potential to monitor their motion habits – their regular speed, stride – every minor detail.
It could assess heart rate, as well. As soon as the device senses a freeze coming, it could respond by sending the wearer either visual or auditory cues to continue walking.
Catalin Voss is a computer scientist at Stanford University’s School of Medicine, explains: “Children with autism can quickly regress down a path of isolation that worsens their symptoms.” - Catalin Voss, Computer Scientist, Stanford University School of Medicine
kids simply wear a Cognitive Sight headset and it goes to work translating facial expressions and emotions of other people during conversations and basic interactions. Stanford’s initial pilot study of forty children has wrapped up, and more clinical trials have begun. But already the impact is being felt, with Voss declaring: "What we’re doing is giving children with autism superpowers." - Catalin Voss
virtually imperceptible to the human eye. This Cognitive Sight technology is so accurate the MIT team believes it could eventually help to identify cardiac disease. One of the biggest applications for this could be with virtual doctor appointments. Now that it’s covered by major insurers, 1.8 million patients are expected to have a consultation with their physician through their computer this year.
------------------------------------------------------- ORCAM Cognitive Sight could soon make all languages universal
The Wall Street Journal predicts that Cognitive Sight’s impact will be so widespread it will “remove the need for a shared language.”
Cognitive Sight device I’m wearing comes from a small company in Israel called OrCam.
AMD some of Silicon Valley’s top C-Level Executives. The founder and CEO was a microprocessor designer at AMD, the $1.7 billion chipmaker. And his co-founder was an engineer for both Hewlett Packard and Sun Microsystems. The “A.I.P. Prospectus” will explore the distribution deals they’ve been reaching at breakneck speed.
A.I.P.-enhanced automotive boom. How many commercials have you seen on TV recently touting a car’s ability to “see” a potential accident two or three cars ahead of yours?
If you have bought a new car recently, chances are it came equipped with hundreds of sensors, as well as front and back cameras.
The information is being captured and recorded from these devices and being fed into the virtual brain of that automobile.
$4 biotech stock that has pioneered a treatment known as biologic implants.
the field of regenerative medicine, where human tissue is implanted into different areas of a patient’s body to help them overcome severe spinal-cord injuries, pancreatic diseases, even heart attacks.
$10 stock that has developed a process I call “Photonic Chip Imprinting.”
By next year, over 1 trillion semiconductors will be produced. This is an unprecedented growth rate. And to hit this mark, the biggest tech firms need this tiny company’s Photonic Chip Imprinting process. Which is why Samsung, LG, Micron Technologies, Intel, Qualcomm, and Texas Instruments are all turning to them. LG http://investorshub.advfn.com/The-Laclede-Group-Inc-LG-18636/
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