Innovation is the Key for AMD, ATI to Maintain Momentum Versus Intel
By Sophia Mayengbam
The x86 processor markets have taken an exciting turning point. In its due course it has touched its lowest and also has reached its peak as the dynamic of the computing market continue to change. Through this change, Advanced Micro Devices (AMD) has emerged as a much stronger and more focused competitor than Intel has faced before. As of AMD has emerged as winner in the battle with Intel to capture a larger market share in the computer processing market.
In spite of the competitive edge AMD has now, it is a much smaller company compared to Intel. According to information technology firm In-Stat, in order to maintain it growth momentum in the market it must continue to innovate and execute.
In response, a much larger Intel has a new sense of urgency and is responding with new products and strategies. In the future, AMD will have to continue to be innovative to maintain its momentum.
AMD's agreement to acquire graphics chipmaker ATI technologies has alerted Intel and in response, Intel overhauled its processor lines and introduced a range of processor addressing high end and mid-size markets. It introduced five new versions of its high-end Itanium 2 chips. Also the company introduced mass-market Core 2 Duo platforms for desktops and notebooks. The company also went ahead with reshuffling its top management team to improve the company structure.
ATI is one of the two major chips makers, and is a big supplier of chipsets, the cluster of secondary chips and interfaces that surround a computer's processor, to both AMD and Intel. AMD’s acquisition of ATI would shake up the processor industry, which is witnessing the battle over market share between the two companies.
"In the face of stiffer competition from Intel, AMD’s acquisition of ATI may be another game changing event with the planned integration of Graphics Processing Units (GPUs) into future PC processors. The battle for the PC is no longer just a processor war, but truly a platform war," says Jim McGregor, In-Stat principal analyst.
AMD, which has taken business away from Intel for several quarters, recently posted higher second quarter results and forecast strong demand for chips in the second half of the year. However, it failed to impress its investors amid fears of worsening price war with Intel. Analysts are of the opinion that Intel may be poised for a comeback with the launch of its new Itanium chips.
AMD’s PC and server market shares have been rising steadily since the first quarter of 2004. According to In-Stat the company has captured more than 22 percent share in both the PC and server markets on the advantages of the AMD64 architecture.
AMD is facing a stronger challenge from Intel’s Core microarchitecture, but has recently enhanced the entire AMD64 product line with DDR support and is currently transitioning to a 65nm production process.
To strengthen its strength in the market AMD is looking to its ecosystem partners for future platform enhancements, such as the Torrenza initiative to provide interface- and socket compatible co-processors for servers and the Trinity initiative to provide open platform management standards.
AMD’s acquisition of ATI faces many challenges, but it is likely to have a major effect on the PC ecosystem, ranging from various CPU and GPU vendors to semiconductor foundries.
In-Stat research, The AMD Challenge: A Reversal of Fortunes, said that the effects of the increased competition from Intel and the acquisition of ATI will likely not be determined for at least 12 months.
According to another study by In-Stat released in June, Intel would find it difficult to maintain its momentum in 2006 and would face slow demand and competition for its is for higher-margin products.
