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Showing posts with label Processors. Show all posts
Showing posts with label Processors. Show all posts

AMD's success is important to budget consumers


Intel and AMD have been the primary manufacturers of x86 based processors; the kind used for desktops, laptops and servers. Snapdragon has been focusing on ARM-based chips – which are used for smartphones like Android. The competition between Intel and AMD in the last three decades has been an essential driver of innovation, which in turn translated to the affordability of high-performance processors and therefore faster computers.
AMD is finally catching up, and it's good news!
The price of a CPU is about 25% of the price of a desktop PC and hence has a strong bearing on the overall purchase prices of machines. Computer prices per unit of performance have been declining constantly up until about the early 2010s from which the price decline slowed. This could also a slowdown in incremental performance improvements in CPUs. A computer from 2010 would be perform significantly better than a computer of the same price in 2007, but a computer in 2019 would only marginally outperform a similar priced computer from 2016. This is mainly because of AMD-Intel rivalry de-escalating in the past years.
CPU benchmark market share | Source: vmozara on Reddit
Intel has always had the upper hand over AMD with over 50% of market share throughout. They have strengthened their position since 2006 and surpassed 80% market share in 2016. There are a number of factors that have led to Intel’s sheer dominance over AMD.

Why did Intel gain so much market share over AMD?

  • Hyperthreading – Intel was the first to introduce hyperthreading, which meant more than one thread of instructions, can run on a single core. This meant that Intel’s cores spent less time waiting and more time working, boosting up efficiency.
  • Lower heat – AMD responded to hyperthreading by adding more cores and increasing their speed. AMD could hence match Intel’s efficiency and performance levels, but this resulted in higher core temperatures, hating up devices and reducing lifetime.
  • Marketing – While AMD was notorious for overheating, Intel boosted up their marketing game, outspending AMD in sponsorships and advertising to cement its position in the market. Intel was loved by the market and AMD was shunned for overheating.
  • Performance vs Price – Intel competed purely on performance and charged higher prices for a comparatively smaller increase in performance of an AMD chip. AMD competed with price and hence consumers perceived AMD chips to be low-performance even though they provided more value per dollar. This perception gradually let to lower sales and hence reduced market share.
  • AMD’s mismanagement and failed strategies – AMD’s executives made mistake after mistake, ruining their finances and therefore running out of capital firepower to combat intel. One example is the story of how they produced Llano chips without properly allocating a motherboard chipset, which resulted in poor sales. They also acquired companies which were grossly overvalued, adding to their losses.

AMD’s resurrection

Because of its superior market position, Intel could afford to price higher and higher, whilst not innovating at the same rate as in the past. This has led to products with marginal performance increases and high prices. This has given AMD time and space to rethink. They have worked on the new Zen architecture, starting from scratch and shifting focus from high-heat overclocking to high-efficiency, high-performance core design. Their new product lineup, Ryzen gets them closer and closer to Intel’s offerings and now with the new Ryzen 3000 brings performance between the two chip manufacturers to the same level.

Ryzen 3000 | Image: AMD.
The fact that Ryzen is priced slightly lower than Intel’s core offerings in general is what is of most importance. Ryzen products provide much more value for money and become more enticing for consumers of all segments. In the last two years, it has gradually lost the label of being the biggest heat-producer. Gamers and enthusiasts has grown to love it, and very soon it will be preferred by all segments of the market from enterprise servers to budget users.

Tom’s hardware has the following data showing how AMD’s market share has grown from 9.1% in 2016 to 17.1% in 2Q2019. They expect it to grow further with the new 7nm process of the Ryzen 3000 series.
The rise of AMD's market share from mid-2016. | Data: Tom's Hardware
Intel will have its hand forced in the coming months and will need to enforce price cuts to compete on the same level as AMD. They would also be forced to innovate and get 7nm chips out themselves to make sure what happened to AMD in the 2000's does not happen to them in the 2020's. Either way, AMD's success is good news for budget consumers who will have access to better technology very soon.

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