The computer hardware deteriorates over time

5 Reasons AMD Processors Are Doomed to Fail [Opinion]

I built my first computer at the end of 1999. It used an AMD Athlon processor with a clock speed of 500 MHz, which was fast enough to play most games at the time and also a better price than Intel. I was also happy to support the underdog.

In Athlon's early years, it seemed like AMD had a legitimate chance against Intel. But over the years the momentum disappeared. Now it seems like the time has come to predict the fall of AMD - and here is why.

The processors are slow

AMD's demise began with Phenom. This microarchitecture, released in 2007, was supposed to bring AMD back into the race with Intel, which started winning with its Core 2 products. Still, Phenom was a bit of a disappointment as it couldn't beat Intel's best. The architecture was saved a bit by low prices, but the performance gap only increased over time in Intel's favor.

Bulldozer, the new architecture, hoped to be more competitive. Instead, it proved to be not only slower than Intel's core processors in most benchmarks, but sometimes also slower than previous Phenom II processors. In other words, it's a failure.

This is a major blow. A new architecture takes years to develop. The company relied on bulldozers, and now that it has proven uncompetitive, they have no way of quickly following up.

The processors are power hungry

AMD processors may not be powerful, but what distinguishes them most is that they use electricity. Phenom has been less energy efficient than Intel processors from day one, and the situation has only deteriorated over time.

For example, the new Bulldozer-based FX-8150 consumes a little less power when idling (around 10-15 watts in most reviews. However, the processor consumes around 65 watts more than an Intel Core i7-2600K over 40% more under load.

Because of this, AMD processor-based systems lose a lot of their value equation over time as they cost a little more. However, the bigger problem for AMD is that this high power draw requires larger power supplies and larger heat sinks. What is Thermal Design Power? [Technology Explained] What is Thermal Design Performance? [Technology Explained] Acronyms are not uncommon in the world of computer hardware. Most people know what a CPU is, but others are darker. One example is TDP (Thermal Design Power). This specification is ... Read More For OEM manufacturers such as Dell and HP, this means an increase in the overall system costs. This also means that high-end AMD processors are unsuitable for small systems.

Discrete graphics don't make money

Although the company is slowing down in the processor space, it is still a strong competitor in the discrete graphics card market. AMD and Nvidia are neck and neck at the moment, and there have been several times in the recent past that AMD's products have been superior.

Although AMD made a profit in the second quarter of 2011, the company explicitly stated that the GPU division had lost $ 7 million. Perhaps even more shocking is that the GPU space only made $ 33 million in the second quarter of 2010. These are peanuts.

The outlook is bleak. Discrete Graphics The 5 Best New Desktop Graphics Cards The 5 Best New Desktop Graphics Cards When you want to play games on your PC, there is no single component more important than the graphics card. Fortunately, video cards are widely available and not difficult to install. The toughest… Read More broadcasts are expected to decrease as built-in graphics become more powerful. AMD does have an advantage in the integrated graphics, but there are no good processors to pair with.

Lack of advanced fab technology

AMD is a fabless company. In 2009, AMD spun off its factories into a separate company called Global Foundries to reduce overhead.

It's not uncommon for a chip company to be fabless. Both Nvidia and ARM are popular examples. However, none of these companies are direct competitors to Intel, which owns factories and aggressively pursues new manufacturing technologies.

As a result, Intel has an advantage in that it can introduce processors with a new manufacturing technology earlier than AMD processors. This is one of the reasons Intel so often has an advantage in performance per watt.

Intel also has much tighter control over its production. It's easier to ramp up production to meet demand when you own the equipment. Production bottlenecks plague the bulldozer, which is often no longer in stock. That's not a good thing - AMD might sell more, but it can't because there isn't enough.

The company is changing direction

There have been a few times in AMD's life when the company has been hugely profitable. This seems to be a strain on the company. At the beginning of 2011, the company's board of directors forced CEO Dirk Meyer to resign. His replacement, Rory Read, wasted no time - AMD recently cut 1,400 employees, representing 12% of the company's total workforce.

Layoffs have hit the company before that, but the interesting thing about this company is that almost all of AMD's marketing staff have been cut. This suggests that the company is no longer interested in marketing itself to consumers or attracting enthusiasts. In addition, the new CEO of AMD has stated that the company's focus is on “Low Power, Cloud, and Emerging Markets” instead of the desktop or even the server area.

I see this as an admission of defeat. The new CEO doesn't think the company can compete with Intel, so the new plan may be not to compete at all. The saying goes that desperate times call for desperate action, and the change in AMD's focus on the market it has been in for over a decade is very desperate indeed.

Bottom line: Being the underdog sucks

Writing doesn't make me happy. I basically like AMD and its processors. There was a time when AMD competed with Intel. However, this has been limited by the use of business practices that have been found to be illegal by both the European Union and South Korea (Intel is based in the US).

That doesn't change the fact that AMD is in a dire position. It can't compete with Intel and can't rely on discrete graphics to make a profit. With that in mind, a sudden shift in focus is logical - but it's a difficult task and I doubt the company will survive as an independent entity.

Photo credit: The Tech Report

Learn more about: AMD Processor, CPU, Intel.