Friday, June 30, 2006

Introduction: On the nature of this Blog:

     I have to confess I have no idea what this blog is about, and Reading Chicagrafo's profile does not help much.

     ¿Is it about Technology at large?
     Then ¿why all I hear about here is About Intel and AMD?

     ¿Is it About financial Markets?
     Then ¿Why chicagrafo refuses to read the works of Aswath Damodaran?

     ¿About the financial Markets of High tech companies?
     This may be the case, but when I try to talk to Chicagrafo about the financials, he says he is concentrated on the technology, and when I tray to talk to him about the technology, he says to me that he is busy with the financials.

     ¿Is it about the X86 Microprocessor Market?
     Then: ¿Why I do not hear about the C7 Chips from VIA? (You know, those that have encryption instructions built in the instruction set).

[Ok, we had our laughs and internal jokes, but see the grain of truth in this]

     ¿Is it an AMD Vs. Intel Blog?
     ¡I think this is it!

     And what is worse, oh dear reader: I have no Idea who you are....

     Maybe you are a bunch of PostDocs (that is what comes after a real Ph.D., not a Ph.D. like Sharikou's) reading it just for the laughs, or maybe, you are a bunch of high school kids with too much time on their hands (I shall know, I used to be one, but I only had books, no Internet, no cable).

     Therefore, as we are forced to do most of the time in the MBA, ¡I will assume!

     I will assume that this forum is abut AMD Vs. Intel, both in Finances and in Technology, and that all other things are circumstantial to this main end. And I will assume that the readership is mixed.

     If I operate under that assumption, the best I can do is to build my theoretical construct step by step, laying the foundations, until the construct is completed. I will leave to Chicagrafo the grunt work of keeping you on top off current events, and dedicate myself to the theoretical underpinnings of my construct...

     ¡Bear with me, as it may prove to be an interesting journey!



Sunday, June 25, 2006

Hello world

Hello audience.

This blog has a new collaborator.

I have a friend who has been contrarian to most of the opinions posted in this blog. He felt enthusiastic about the possibility of posting the criticism himself, so I agreed to grant him the permissions.

Welcome, Howling.

Friday, June 23, 2006

Fourth Factory

It's simple:

  1. Multicores that need bigger dice, and drastically reduce yields.
  2. Proximity to the silicon processing partner, IBM
  3. The Albany Technology Park
  4. Highest qualified people available a plenty
  5. Greatest Communications/transportation Hub of the entire world
  6. Increasing Market Share
  7. Technology Leadership
  8. And a bit of help from the State of New York.
Since the stock price movement of AMD is totally absurd, this will induce a slide in the price share and I didn't cover my written calls, but I am very well aware that my shares are worth much more!

Thursday, June 22, 2006

Responses to Criticism

I have received intelligent criticism, which I feel honored and proud to have received. It would be easier to reply and follow threads if whoever posts comments "signs" them with a nickname, such as "Last Mohican" or whatever.

My responses:

Received from "Third Factory..."

Errr... 3rd factory? (I though it was replacing an existing factory - that would make 2)

Your analysis on capacity is way off, several obvious issues:

1) you assume F36 will be double the output of F30 - that would be true IF they both had same wafer starts/month (which they don't) AND 300mm has same yield as 200mm - I haven't seen any data that 300mm yield = 200mm yield for AMD.

Who has seen the data you are demanding?. There is no reason to think that yields have to be lower at 300mm, they could, but I would like to know possible reasons. Same thing about the number of wafer starts. Under the reasonable assumption of other things equal, the fact is that 300mm wafers have 225% the surface of 200mm wafers, thus, Fab36 should be, eventually, in conditions to supply, all on its own, 40% of the market, because Fab30 supplies 22%.

2) I believe <10% of AMD's current production is dual core, as they migrate more to dual core they will get fewer die/wafer (unless of course they continue to plan to only make 10% dual core...) And any quad core production will cut into capacity even further. That cuts the legs out of your 300mm will provide 2X the dies of 200mm argument (it will be ~same if you account for migration from single to dual core) 3) The conversion of F30-F38 will actually limit their production during that conversion to <2 fabs
AMD prides about lots of accomplishments such as running test wafers next to production ones in the same lines. I am willing to be optimistic and assume that the disrruption of the retrofitting Fab30 will be light.
[...]Another thing to keep in mind is 300mm automation and material handling systems are completely different so it is not just a matter of swapping 200mm tools for 300mm tools. FYI - 200mm-300mm conversion is not "radical upgrading"; numerous IC manufacturers have done this.
So, you are saying that the equipment is totally different and the transition is not radical (!?)
Another anonymous post:

Just a (few) problems with your knowledge of process technology:

"The transition to 65nm was neutered by AMD's 90nm sSOI; pushing them further down the path toward 42nm."

It's 45nm, I thought it may have been a typo until you repeated it again.
Yes, I made that mistake. Do you find it particularly relevant?

Your other link says: "The wires are thinner, the resistance is higher, the lost power greater."
The "other link" should refer to "Intel's 65nm is just marketing"

Ummm... the major power deltas between 90nm and 65 nm is off state leakage casued by leakage between the gate and channel and from source to drain (neither of these have anything to do with "tiny wires". Also SOI doesn't impact either of these - the main
I don't say they do. I was just illustrating an idea, that the transition to ever smaller transistors incurrs in trade-offs in which things that used to be negligible are not anymore.

benfit of SOI is latch up protection which can be minimized much more cheaply with better implant processed. (SOI adds at least 10-15% to production cost of a wafer)
That is your opinion, and most definitively not authoritative. Googling SOI I found studies that prove SOI to be more than cost effective.

"APM, a robotic tech. for chips production"

Do you actually think APM has or uses robots? It is just a SW control system - all other
Sure, I think it is Rosie, of the "Jetsons", the female maid robot (Robotina de los Supersónicos para los panas hispanohablantes) who made AMD to win the best factory award by Sematech for years and years (as mentioned by Daryl Ostrander here, slide #17 of 28). But of course, you are entitled to think that AMD is like Intel in which the manufacturing process is controlled not by robotic technology but "Copy Exactly!"ing the factories. Are you going to say that is as flexible as AMD's? Anyway, I am not scared to acknowledge that I misused "robotic" to refer to Automated Production Manufacturing, but it is implied that the machines intervening, since they are computer controlled, qualify as robots.

the major manufacturers use their own systems (TSMC, Intel, Samsung, etc) - it is impossibel to compare the systems as none of the companies disclose the specifics of how and what they do.

"First fallacy: It is cheaper to manufacture the same number of transistors at 65nm than 90nm"

As you get roughly double the transistors your yield rate would have to go by a little less than a factor of 2 for it to be cost neutral (the reason it is less than 2 is that there are additional manufacturing steps and 1 metal layer which adds cost to the 65nm process. Your analysis is not congruent with your statment as you are comparing an older technology on single core (or 1/2 cache) to the newer technology with dual core or (double the cache). Your statement above says same number of TRANSISTORS (the
Perhaps I am wrong, but in my ignorance, I have seen a lot of people referring only to the benefit of the smaller size, that is, half the "variable cost" of production, ignoring the outstanding capital investments of retooling for more detailed silicon processing, or the "fixed costs". And by the way, the yields *do* take a hit
65nm example you give has many more transistors, thus you are comparing apples to oranges)

I'm not sure what you're background is in, but it is clearly not semiconductor process tecnhnology or manufacturing.

You are right about that last one; although sincerely you make me wonder whether you are even more ignorant ;-)

From "Bears run to cover":

Please explain to me how SOI minimizes the amount of leakage between the gate in a transistor and the channel (which are spearated by a 12A gate oxide)? Hint - it doesn't.

Please explain to me how SOI prevents lekaage between the source and drain (which is separated by the Si channel)?. Hint - It doesn't

SOI does not have significant impact on leakage - the reason between Intel P4 and AMD K8 power is chip design and clock frequency! Hence, Conroe which has much lower clock frequency than the P4's has a much lower TDP on the same manufacturing technology.

The only leakage path SOI addresses is junction leakage which is a distant third to gate leakage and source-drain leakages.

You may call me superficial, but wikipedia disagrees with you:
Silicon on insulator (SOI) is a layered structure consisting of a thin layer of silicon, from 50 nm to 100 µm, which is created on an insulating substrate, which is usually sapphire or silicon with an insulating layer of silicon dioxide(SiO2) 80 nm to 3 µm thick on its surface. This process reduces the amount of electrical charge that the transistor has to move during a switching operation, increasing speed (up to 15%) and reducing switching energy (up to 30%) over CMOS-based chips. SOI chips cost more to produce and are generally used for high-end applications. [my emphasis]

Switching power loses are the most significant at these speeds and feature sizes.

Another anonymous, from the same article:
Fanless: Can use just a passive disipator: No noise, no mechanical parts that wear down and deteriorate

Some questions:
1) what is the major source of noise in a computer?
2) what is the failure rate for a CPUY fan; based on your comment above this is an important factor?

Let's see, in *my* computer, it is not the harddrives (I buy the quiet ones), it is not the Floppy (which I don't even have ;-) it is not the DVD drive (which I seldomly use), it is definitively not the network connection. It is the power supply fan!. Now, if I had a "Rackable" computer, one of those which has the power transformer outside the computer, or if my computer were powered by the twisted pair cable as some routers are, guess what: It would be **me** the noisiest component of the computer! wouldn't that be cool!?

Please, leave some sort of a nickname, and sincerely, thank you for your criticism, it has been constructive for me to reply.

Saturday, June 10, 2006

Is effective the price war?

[Updated Jun 13]

An effective price war would be one in which lower prices make the competition to lose market share, or to lower its prices.

It is possible to assess whether a price war is being successful or not from the perspective of a normal citizen, we can just look at any store how the products are moving to have an idea. This method is not scientific, but other things equal, I don't see major reasons to think that the city where I live, Chicago, is not representative of at least the rest of the United States.

I have been a client of TigerDirect because I am very price-conscious, and I guess that TigerDirect is not famous for handsome quality but for cheap prices; thus, among the clients of TigerDirect Intel's discounts should be more effective than among BestBuy's or other suppliers. But this link tells us a different story: AMD processors have certainly taken a popularity hit because they have been pushed from the top sellers list #1 to #N position to the fourth, but the prices are about the same prices they had before while at the same time retaining a lot of popularity. What is very interesting about this list is that you can see for the first time in history that AMD prices are not half of an equivalent of Intel, but double, for an advancement of the brand recognition of 4x.

Of course that it is arguable that a Pentium 4 E. E. (Extreme Embarrassment edition) 3.2 GHz/800 MHz at 1050 would be the only counter example of a product not even up to an AMD FX-55 and yet much more expensive, but you can check the rest of the list: The Pentium Processors are finally being given their deserved price, that of crap.

Given that the prices of AMD products remain at the same levels, it only remains to be seen if the market share is holding its ground.

A member of the audience game us an interesting link to a "Dailytech" article in which it is detailed leaked information about steep price cuts plans for AMD processors for July 24, around the launching of Conroe. This is yet another sign that finally AMD is "feeling the pressure", bad omen for this quarter's results.

So far, my take on the July earnings report is as follows: AMD beats the expectations by ample margin (yet again), around $0.34 EPS, but Guidance will be un-optimistic, and perhaps we will have to bear the acknowledgement of one or two market share percentage points lost during the quarter, effectively ending all the momentum growth in the consumer segments and taking the share price to the $25 levels. Nevertheless, it remains to be seen the resilience of the server market, remember that AMD has technology to keep growing in those segments. Thus, $25 would be an absolute bottom for me because the server part of the business has to increase what I think is the share price accounting only for consumer segments ($25).