Wednesday, July 12, 2006

On the playing field of companies:

Imagine that this is the WWF (or the extinct WCW, or the WWE, or whichever you fancy). And we are about to see a match. Two guys get into the ring. One is The Undertaker, and the other is Some blonde from the De-Generation X. The match begins, and there are thousands of things affecting the match and affected by the match.

Of course, there are some things affecting the match that are completely internal to the two wrestlers (size of heart, size of the lungs, dosage of steroids taken, amount of previous training and workout), some of them are internal to them, but bear interaction with the outside world (mouth to shout, arms and legs to use). Then are the real external ones, like fighting style, number of moves known, et cetera. Some are in the environment, like metal chairs, or the poles of the ring (and how masterfull is each fighter using them). And ¡hey! ¡if you thought there were just two contenders, you are wrong! there is Yokozuna, who "happened" to be in the arena, and this guy Hulk Hogan who refuses to let go and passes the chair to one of the guys. Then there are other stakeholders, like girlfriends and friends of the wrestlers... But it does not stop there, there is the regulator (the referee, McMahon), then there is the paying (per view) customers, and the guys who pay tickets and buy magazines and action figures. And the bookies. And then there are the horoscopes of the guys...... You get the idea....

So ¿What are the things that affect a firm, any firm?

Well, first there are some internal thing like the Core Beliefs, Mission, Vision, Strategy and what not. Then there is Recruiting, Compensation plans, Evaluation Policies, Financial Position, Production methods and capacity and what not, that are internal, but bear some relation with the external world

Then we have the Product's Technical Merits (real and perceived), Product Quality (conformance and customer defined), Marketing, Public Relations, Brand Image, Industry relationships...

But wait, it does not end there, some players may be interested in the outcome, producers of complementary products, for example (chipsets im the ┬ÁProcesor industry, hotdogs in wrestling).

The market as well is interested. You, as a father, do not want to buy for your children the action figure of the guy that looses all matches (unless the child specifically asks for it); and you do not want to buy a Betamax either.

But wait, it gets better: ¿Are you polluting? ¿Creating jobs? ¿Saving the Wales? ¿Paying your taxes? ¿Abusing your Dominant position? ¿Using Predatory Pricing? ¿Are your products made by 12 Year old children in sweatshops in Asia? ¿Are you showing nipples in prime-time in the USA (in Europe is not such a big deal)? These are called non market issues.

But it gets even better, if you are in the Electricity or Telecommunications Business, you may have Solar System Issues (solar flares, solar storms and solar spots come to mind), if you are in Satellites, add to that asteroids....

But it gets even better than ever before: You can have Galactic / Universal issues: If you are a chip maker, ¡Cosmic rays can wreak havoc with you! ¿You do not believe me? Well, check the link

(This is the first link I post because this is so obscure that googling for this is hard. I assume that the audience can use google for some of the things / people / theories / facts I mention , if not, this is not the right blog for you)

In the coming weeks, we will analyze one by one all those factors, in our attempt to understand what is happening in the Intel vs. AMD struggle.




Anonymous said...

Great! I'm sure it'll shed light on the nature of competition in the industry as well as being throughly interesting. Oh, and good luck and thanks in advance. ;-)

Anonymous said...

Ok, I'll check in. Your off to a good start.

Anonymous said...

NDA time is nearly over and Conroe just hammered AMD FX for good! Woodcrest crowned King of 2P servers! AMD shares suffers several dives after desperate pumping. IBM's Cell processor yields are terrible, and since AMD is its partner.. this will be reflected upon (and possible reason for 65nm delays). SOI wafers actually costs at least 5X more which affirms the reason AMD could not further reduce prices to compete with Intel... K8L in 2008 means for 2 years AMD does not have a competing product in hand...

Heads still in the clouds?

Anonymous said...

Actually 300mm SOI is not really 5X more but it does add ~15% to overall wafer fabrication cost (before dicing and assembly/test). Although I would suspect the sSOI variant would be even more which is supposedly what is being used on 65nm.

As for cell yields - that is interesting; but it is difficult to say if yield problems are due to complexity of the chip design or the process technology maturity (can anyone verify it is only being run on 65nm process?)

Eddie said...

there are posts which are so stupid that I don't know if I should just delete them.

In this case, I will reply, because your imprecisions may harm:
1) SOI is merely about 15% more expensive.
2) It may be the case that AMD has cost advantages (perhaps it is cheaper for AMD to manufacture a processor with the same die area thanks to APM)
3) Cell processors are not an indicative of AMD processes.
4) The K8L may get to the market sooner than expected, even the 65nm products.

It will be moot very soon, but to be "crowned", the products should be in the market, don't you think? Until today, Woodcrest and Conroe are the same thing as Merom: Announced products, not *available*