Innovation the Key for AMD/ATI to Maintain Momentum Versus Intel

In-Stat: The x86 processor markets have gone from boring to exciting as the dynamics of the computing market continue to change. Through this change AMD has emerged as a much stronger and more focused competitor than Intel has faced before, but it is still a much smaller company than Intel and must continue to innovate and execute to maintain its momentum in the market 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. 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, t.

• AMD’s PC and server market shares have been rising steadily since the first quarter of 2004. The company has captured more than 22% 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.

• 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.

• The effects of the increased competition from Intel and the acquisition of ATI will likely not be determined for at least 12 months.

The AMD Challenge: A Reversal of Fortunes Publ 20060808