Another margin call!

It is getting annoying the margin maintenance rules of eTrade: I have an investment system for AMD, that believe it or not, every time I make lots of money, I get a margin call!

It has to do with the margin rules. In eTrade, as many other brokerages, the shares you own may be used as collateral for the margin loan, that is, the guarantee you give of being able to pay your margin balance are the shares themselves. Nevertheless, options can not be used as collateral, then, if for some reason you gain lots of money on options while you lose comparatively less on shares, you may lose "margin equity" and get a "margin call". This has happened to me so often that I lost track of the number of times.

My investment system is not very easy to describe, so be prepared to read this several times: I write short term at-the-money covered calls, meaning that I sell calls of strike prices close to the current stock price to expire in a few weeks backed up by shares, but in reality, I use the covered calls as a hedge and money flow to pay for the real investment, quantities of very long term and far-out-of-the-money puts. Since I gain either way with the shares moving up or down (or even more when they move sideways, yeah, I am like the casino: "The House Always Win") I go full tilt with margin purchases, and when I say "full tilt" I mean that I really buy everything I can buy on margin [ note: there are a number of adjustments that I do that may imply acquiring calls or other complicated plays against the market or bullish the market, but the bottom line are the written covered calls with shares overprotected ].

Anyway, when AMD crashes, as it happened recently, those puts really appreciate, much more than what I lose on the shares (the gains on the written calls are not significant in this case); but since the puts do not count towards margin equity, I get a margin call, and typically it forces me to sell a chunk of long term puts, which pisses me off 'cos I have to make sure that the order gets executed the margin call day and so I get hit with the bid/ask spread that may be huge in highly volatile environments...

Fortunately, this time I really wanted to reduce my AMD positions because half the downward movement I expected to happen in 2007 already happened, so, the next half is not so clear: I am not so sure that AMD will go below $7 now that it is @$10, not with the same conviction I had when it was at $13.50 that it will go below $10. I could, in principle, "neutralize" the position to not speculate on whether AMD will appreciate or not with the intention to just "milk" the written calls at over 1% per month of total gains including margin interest and all; but I think I can give my money better use. All in all, I sold 1/4 of my AMD positions and I am now 1/2 as bearish as I was before.

How Foolish of Me

I have been thinking for a while about writing an article about my mistakes and the learning process that made me turn 180 degrees. I hope my personal experience may help other investors. I have written about my screwups several times, especially in the recent article "Exploration", but this subject has not been covered comprehensively. Anyway, I was a bit too ashamed to really get done with it, waiting in hopes to get a bit of vindication from the market, which happened recently. Also, somebody posted a comment for my last post pointing out some of my mistakes, the author actually did some research of old posts of mine, and his help giving me a cue has been "the straw that broke the camel's back".

I began as an "staunch" AMD supporter and wrote profusely about the chances this company had to displace Intel, both in technology and finances. Nevertheless, Eventually I renounced my own opinions, after losing lots of money and having several changes of mind. I finally settled at pretty much the opposite opinion, that AMD is collapsing, although I have been very consistent about AMD's deterioration this whole 12 months. I also anticipated the market with my investments, which recently led to significant gains, so, I got half vindication, perhaps I am not a total fool after all.

Still, the most expensive mistake in my whole life has been to be dismissive of the Core µarchitecture from late February to October of 2006. You may go back to my posts explaining why I made the mistake, but from July of 2006 on, the process of discovering how wrong I was is very well chronicled in this blog and you may find a good summary in "Exploration". There is one thing I have been half-right about Core, though: I said that Intel will be relying solely on shrinks to improve speeds and performance, which has been half-true, it hasn't been just shrinks, but overall silicon process improvement, and a new µarchitecture with substantially different features like point to point interprocessor communication and integrated memory controller is approaching. Anyway, I think this subject has been well covered in the blog, so, I am going to concentrate on other aspects:

The fellow commenter quoted from "Third Factory" (late May of 2006) this list of reasons for "AMD to get to over 50% market share":

1. Good, proven management
2. Good, proven, exciting technology
3. The brand name has appreciated significantly, creating a loyal customer base
4. Technological leadership assures media exposure, free good publicity, public awareness, toghether with the enthusiasm of partners in the ecosystem
5. The ecosystem itself
6. Production Capacity!

I was right on several of these items, or at least there weren't too many reasons to think otherwise:

Was AMD's Management good, up to May of 2006? -- Yes!. For the most part, the people in high positions at AMD are either those who saved the company and succeed big time with Hammer or their chosen successors. Hammer was quite a gamble, full of technical and market very hard challenges at which AMD triumphed. With the good work this people inherited, they broke barrier after barrier, taking the company to a position of undisputed leadership. But, as I explained in "Exploration" and many other posts, they later demonstrated to be clueless about how to capitalize on the leadership AMD attained and overstretched the company's resources for tragic consequences. In late May 2006 there weren't many indications of the catastrophic decisions to come, if anything, only the dull launching of AM2 and the insidious denial of the Core µarchitecture threat. Yet, as I explain in "Exploration", I had every intellectual tool to suspect that AMD's management could fail miserably with AMD in a position of leadership, that was terrain unfamiliar to Management, thus, on top of making a huge mistake, I missed my unique opportunities to realize it before it was too late.

AMD still has the exciting technology. You only have to read "Cove3" posts in the Investor Village AMD message board to get convinced, Cove3's unfailing hopes on an eventual AMD superiority still have a bit of chance due precisely to the design superiority.

How is it that AMD still holds to a larger than historic market portion, especially now that every single AMD processor is very far from Intel offerings, that Intel is providing better value, and the new processors are as mediocre or worse than the old generation?: AMD enjoys the inertia from the massive momentum it generated the days of K8's rule, the brand awareness expansion, the opening of business with all major OEMs, etc.

How was I supposed to predict that AMD's management was going to kill the "Virtual Gorilla"? I am still puzzled by the irrationality of the ATI acquisition!

Regarding production capacity, at the time AMD had a credible schedule of capacity growth and having production sold out, even after Core-based processors were launched.

So, I wasn't quite wrong from the point of view of my analysis of the possibilities of AMD, just that Management did very weird things with those possibilities. Conversely, what I identified as Intel mistakes turned out to be Grand Slams because AMD made turds of its possibilities, I still don't think that I was all that wrong regarding Intel. That was yesterday, things now are totally different, Intel rules and AMD tries to follow.

Also from "Third Factory", I was quoted this:

Confirming that AMD is closer to the bleeding edge of technology than Intel, there is the potential of things such as Z-Ram (Zero Capacitor RAM with 5 times higher densities than regular six-transistor flip-flops). I don't know about the introduction rates for semiconductor technology, but it seems that very soon, like in the scale of one or two years, AMD will be able to include Z-Ram either as L2 or L3 cache memory. All that separates AMD from glory (and Intel from demise) is 8 Mb of cache internal to the µ-proc. Z-Ram may be precisely that. Remember that the gigantic L2 caches is the snorkel that prevents the already shit-submerged Intel from drawning, Z-Ram may nullify that...

I screwed this up. But still, the greatest single contributor to Core superiority is the large shared L2 cache. AMD, due to its pathetic incompetence to both evolve the K8 architecture towards shared L2 cache and to manufacture large caches, led to the cache architecture of K10 with its performance hits of inefficiency (half the cache, the four L2s are not shared), small size (2 MB shared L3, 4*512 KB L2 not shared/L1 exclusive, 8*64Kb L1 total for a quadcore), and the introduction of a third level with its associated latencies. I may have adopted the thesis that the shared cache could led to race conditions, but I think I quickly grew out of it, the shared caches are superior, period. Another thing is that I had faith on Z-Ram, only recently I lost confidence on it, the same way I lost confidence on SOI (more about this in a minute).

The commentator wrote the following:

And here's a secret for you - EVEN if AMD implemented high K, immersion litho ADDS NOTHING TO PERFORMANCE - it is merely another technique to print the same size 45nm features (Intel chooses a 2 pass process on the critical steps instead). In the end the feature size is the same. Immersion is just another PR gimmick to make it seem like AMD is ahead, while the scary truth is Intel has far superior litho capabilities as they are able to EXTEND AND REUSE the older dry litho one generation further. Sorprisingly even with a 2 pass process, it is still cheaper than a single pass immersion process as the immersion tools are nearly 2X higher price, run at slower speeds and are less mature than existing dry litho technologies.

I never said that immersion would give AMD any performance edge. It is true that, if anything, immersion gives production costs advantages; but my thesis has always been that AMD should prioritize performance over everything else, then power efficiency and only then production economies. Unfortunately, the company chose, apparently, exactly the inverse order of priorities. Recently I have hypothesized about the reasons: AMD assumed it was going to be capacity-bounded, even after the early warnings regarding the Core µarchitecture, and kept executing plans that assumed extraordinarily strong demand for entry level/mid level performance even in the face of mounting evidence that Vista was a flop, the market was saturating due to Intel's "osbornization" of Netburst and AMD-specific demand deteriorating fast.

AMD's management insistence on prioritizing efficiency over performance always stroke me as "fishy", being production costs easy to misreport and power efficiency an easier goal than absolute performance. Then, when the highly anticipated 65nm launch happened late, in scant quantities, fat (75nm equivalent shrink), slow, worse IPC, and saying bullshit to explain the worse IPC, I finally got conviction for the Bear case.

Until then I had trusted AMD's Management. I had increasingly stronger disagreements with Management regarding strategy issues like not launching the "coprocessor revolution", not being decided to make the Linux market an stronghold, but I always gave them the benefit of the doubt. I took the assumption of the "triple challenge", together with its difficulty and its "unnecessariness" as evidence that AMD's manufacturing capabilities were superb. I couldn't conceive that Management could be so irresponsible as to commit the whole company to this without having guarantees of success, but the bad 65nm process was overwhelming evidence to the contrary. This had staggering implications: If AMD's management could be that irresponsible, there was no reason to suppose they knew what they were doing when they acquired ATI, the single die quadcore couldn't possibly be any good, no new good processor would be launched this year, ATI would hemorrhage its Intel-based market share to nVidia without mitigating increased AMD-based market share, the finances of the company would deteriorate to the point of mortgaging the R&D and capital expenditures necessary to accelerate the development of Fusion and to escalate the investments the 45nm and beyond feature sizes would require. This would become a vicious cycle, an exponentially accelerating decline, and, finally, the kludge-but-practical approach of the double-duals would become a great instrument for Intel domination and a bridge to architectures that would close the design disadvantage. Metaphor: AMD tried to jump ahead of Intel but stumbled and fell, suffering life-threatening polytraumatism.

I was yet to be disappointed once more by AMD's management: the Analyst's Day last year in December. I got fooled because I still thought Management could not lie so shamelessly as to promise all the things they promised. The market was fooled too, the price momentarily shot up, but very soon reality took over.

When AMD's 90nm process was no worse than Intel's 65nm process in early '06, there were reasons to think that the upcoming 65nm process would be vastly superior, and that SOI had inherent advantages over strained bulk silicon. Within that frame, "65nm is Intel Marketing" made sense. The key argument there was that there is a problem of "diminishing returns" for ever smaller feature sizes, and I misidentified Intel's strained silicon as more vulnerable to this problem than SOI. I still would like to know what is so special about AMD's 90nm process that makes it superior to its successor, but given the evidence, it seems that the diminishing returns in SOI are more acute than strained silicon, perhaps the heat dissipation disadvantage of SOI aggravates more than the inherent advantages of smaller feature sizes, and I realized very late the significance of Intel's R&D muscle when applied in full force, the great advances of metal gate/high K transistors.

I am particularly ashamed of "Good time to buy AMD", published in October 19, 2006. That the price actually went up until December is besides the point, that article reflects doubts about the Bear case/optimism, like trusting Management on several topics ranging from the merits of the ATI acquisition to seeing them capable of great initiatives like the "coprocessing revolution" while they already had farted the "Quad FX"; seeing strength of AMD demand while all there was was simple inertia; not understanding that although Intel was in a reactive position, AMD's successes and failures at so many innovations gave Intel a clear view of what to prioritize, just what it needs to allocate its resources efficiently to ultimately bring formidable competition.

I wasn't clueless in the AMD-Intel periphery: Dell crashed, the Dell-AMD deal apparently turned out not so good for AMD, Vista flopped, Sun solved its personality complex, VMWare turned out the sensational IPO (although I was too timid to join in early and tried to milk volatility at the worst moment), Apple is triumphant with its iPhone, Google has gone stratospheric,... I developed a partial model concerning price manipulation that actually boosts my already successful and proven "money pump" system... But I can talk about those subjects with concrete predictions in subsequent posts

AMD's 65nm Process Hurts AMD

In our blogosphere neighborhood Roborat64 addressed the topic of the involution of AMD's product line. I would like to complement his words with a bit of updated concrete evidence.

In "New > OLD" [ Note: I tend to shorten the names of articles if they are properly linked to, this article originally is named "The Fundamental Law of Progess [ sic ] NEW > OLD" ], Roborat64 says: "the fundamental law of progress [...] demands all NEW PRODUCTS [TO] BE BETTER THAN OLD PRODUCTS", but "it is increasingly alarming how AMD seemed to be moving backwards". "The introduction of slower 65nm CPUs and now K10's inferior performance to K8 are just some of the bad habits AMD seemed to be developing".

If we rewind one year to the introduction of 65nm K8, we will see that, from the point of view of the customer, AMD offered worse new products: Processors with some increased L2 cache latencies, that is, an slightly smaller IPC, and clocks not as fast as the fastest 90nm products. At that time, some people thought that AMD emphasized low production costs over higher premiums because AMD was production bounded, especially due to the possibly great increase in demand coming from Dell [ Many other posts contain abundant references as to the catastrophic consequences of this strategy ], and then the optimists assumed that there was no problem with AMD's 65nm process, the company was going to be able to quickly jack up clock speeds in the new process. But that didn't happen. The optimist then insisted on the superior power efficiency of the 65nm, but unfortunately the market cares very little about this parameter and they don't want to accept this fact.

I predicted serious problems with the speeds of the 65nm as soon as I saw AMD's explanation for the increased L2 latencies in 65nm K8: Supposedly, the architecture increased the latencies to leave room for future L2 expansions. Taking into account that the L2 of Brisbane already was half the capacity of the high end 90nm, 512MB versus 1MB per core, and that AMD "could cross that bridge when it got there" for a subject as simple as L2 parameters, there was no other way to interpret AMD's explanations as bullshit, that the company was forced to cut corners because it could not do a good shrink. Taking into account that the 65nm was introduced later and in smaller quantities than expected, I hypothesized that the problems were serious. To confirm this appreciation, AMD has launched ever more disappointing processors, and contrary to any tradition, the products of highest clocks are all old process!.

We must visit AMD's official pages to confirm this highly unusual situation, go to http://products.amd.com/en-us/DesktopCPUFilter.aspx and select both "90nm" and "65nm" in the "Manufacturing Tech (CMOS)" pull down list:

90nm top of the line: 6400+: 3.2 GHz with 2 MB L2, 1.35/1.40 V, 125 Watts.

65nm top of the line: 5200+: 2.7 GHz with 1 MB L2 (half the size), 65 Watts (half consumption, or roughly 61% power consumption accounting for the speed difference, much better, but then again, what does it matter that it consumes less power if things are slower?)

It may be argued that the top of the line in 65nm product is the Phenom 9600, the quadcore @ 2.3 GHz. Too slow, that is what I say. It is so slow, that it has been proven slower in many workloads than AMD's own dual cores... [ link may be found here ]

A very similar thing happens in Opterons:
No 65nm dual core Opteron, measly 2.0 GHz top of the line Quadcore, the 2350 and 8350 [ link ], and a top clock of 3.2 GHz for the 90nm top of the line dual cores, the 8224 SE and 2224 SE [ link ]

AMD's own price lists demonstrate the horrible catastrophe the company is in:

Family	Model	Process	Freq	QC/DC	Price	Price per core
Opteron	2350	65nm	2	QC	$389	$97.25
	8350	65nm	2	QC	$1,019	$254.75
	2224 SE	90nm	3.2	DC	$873	$436.50
	8224 SE	90nm	3.2	DC	$2,149	$1,074.50
Athlon 64 X2	6400+	90nm	3.2	DC	$220	$110.00
	5200+	65nm	2.7	DC	$125	$62.50
Athlon 64 FX	FX 74	90nm	3	DC	$300	$150.00

An interesting first observation is that the price per core of 90nm may be more than four times (!!!) the price per core of 65nm processors...

We know that 65nm processors take more than half the die area of 90nm processors because the shrink was to an equivalent node size of over 70nm, we must also expect the yields of the 65nm process to be smaller, and the binsplits to be worse. Furthermore, in the case of quadcores, we also know that the yields and binsplits are quadratically worse than dual cores. From the point of view of production costs, the 65nm are not even twice as cheap, but from the point of view of ASPs, they are way less than half the 90nm, it is clear from the table above that the 65nm is actually hurting AMD! because it is more expensive to manufacture the 65nm product to obtain a smaller selling price.

It may be argued that this is a biased explanation because AMD chose the 65nm process for volume and 90nm for premiums, but this is illogical:

1. We know that the market is saturated by entry-level crap (Intel Netbursts still being purged, Celerons, and even Yonah/Sossaman Core Duo/Solo incapable of 64 bits), thus the product moves only through steep discounts, thus if AMD would be able to, it would target the 65nm product for the upper segments.
2. 65nm should have many inherent advantages regarding performance, by insisting on the semi-exhausted 90nm product for top of the line performance, AMD is mortgaging the future of the company.

AMD's words that they already shifted the focus to the 45nm process is a very laughable statement: It has been pretty much demonstrated that there is something serious on the 65nm process that hasn't been solved, why would it be any different at the 45nm process?. Perhaps it is something like that 65nm didn't allow for the same performance of the 90nm process due to inherent limitations, perhaps, the power consumption didn't go down in the same magnitude the heat dissipation problems of SOI went up, I don't know, I am just speculating, but what I do know is that there is a serious problem and AMD is denying its existence.

I feel as if I were beating a dead horse by saying that if the 65nm process didn't scale, it is of very little relevance that AMD will make immersion 45nm if it doesn't have the excellent advancements of High-Dielectric-Constant / Metal Gate transistors Intel is bringing to the market. It is also beating a dead horse to point out that K10 demonstrated that it is a dubious improvement on IPC due to the increased latencies in the L3 cache because Intel comes with Integrated Memory Controller/Point to Point interprocessor communication architectures with enlarged caches and higher clocks!. But what AMD and its cheerleaders are doing, of pegging new hopes on the 45nm process and the dual core K10 to come, is like putting the cart ahead of the horse.

Exploration of the Business Space

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In the parallel evolution of AMD and Intel, the advantages of Intel's economies of scale express in several ways that are not very obvious. This post will explain one of those forms that I didn't fully take into account when I was bullish on AMD, and from this principle I extract an important lesson regarding investment in the stock market.

How was it that Intel regained the absolute leadership of the processor market? At the heyday of the Netburst architecture, and with the company absolutely committed to its development, Intel still gave the P6 architecture chances to develop. Not only that, but the company also persevered at the Itanium while quietly it kept developing the strategic plan B of Yamhill, what eventually was christened 'EM64T', the AMD64 clone. So, while officially the future of Intel was the Itanium architecture, and the Netburst architecture represented the required transition; the company still kept going forward with architectures that were their antithesis: the AMD64 ISA capable Netburst and what is much more remarkable, to insist in the apparently exhausted P6 architecture [full line here].

At times I thought that it was a gigantic waste of resources to expend R&D on so many dead ends. I mean, after I studied the Itanium architecture it became clear to me that the thing was going nowhere [ too complicated to implement, too disruptive for the industry, and it had too many 'brain damaged' features to exclude the competition ], and I became a fervent supporter of the original Athlons because it was obvious that Netburst was all marketing gigahertz, but although I disagreed with the directions that Intel took, I still thought they knew what they were doing, that is, I thought that Intel could somehow force the market to become a monopoly of very inferior products the way Microsoft forced the Operating System market to turn into the monopoly of the worst Operating System of its time.

By contrast, AMD's plans seemed crystal clear, and sound: To concentrate 100% energies into an evolutionary approach (AMD64), to capture the best features of the architectural propositions of the time, like the Point to Point interprocessor communication that implied integrated memory controller, SOI versus plain ole' bulk silicon, and so on. That is, I though that although Intel had several times the R&D budget of AMD, since Intel was so wasteful and AMD so focused, the underdog had plenty of chances to topple Intel from its leadership position for good.

But needless to say, I was wrong, and paid a dearly high price for it. My mistake was to overlook that the competitive situation between these two companies is so complex that it was justified to expend R&D money in several contradicting approaches, no matter how improbable their success may seem. I should have known better, because I have worked too much in the field of Artificial Intelligence, thus, of all people, I should've realized that Intel was conducting extremely valuable "search" (exploration) of its business space. That the more contradictory the approaches it followed, the higher the assurance of ultimate success. And sure enough, although they grossly miscalculated their priorities assigning them to Itanium and Netburst (and in that order!), the 'Plan Bs' of Yamhill (EM64T) and P6 saved their skin and allowed them to ultimately restore their leadership and monopoly.

On the other hand, AMD enjoyed immense success at focusing at the right things and following the sound design principles embodied in K7 and K8. It seemed as if the success was going to break Intel's monopoly for good, and anticipating that, I vested my money aggressively into that thesis, and lost acutely.

Now, again, why did I lose?
I explained that I always understood what a great challenge (the triple challenge of "Does AMD...") it was the single die quadcore, and that naïvely I thought that AMD's management knew what they were doing, I couldn't conceive that AMD's management could be so irresponsible as to gamble the company at this huge undertaking if they didn't have guarantees of success. Then, it was clear that they didn't have any guarantees, as a matter of fact, no reason whatsoever to suppose the single die quadcore/new process/new architecture challenge was going to be successful, but it was too late already, two thirds of my money had gone.

Did I have any chance of being right, though?
Not really. I should have followed my convictions to their conclusions. Not only the single die quadcore represented a huge challenge, it was a totally unnecessary one too, and again, I thought that AMD's management knew better than me:

I knew in 2005 that the market will not require full quadcore performance as early as 2007, not even 2009; the reason is very easy to grasp for a seasoned software engineer: The combinatorial complexity of multithreading software. To do software that makes effective use of two threads is more than twice as hard than single threaded, to do software that makes effective use of four threads, is more than 10 times harder than two threads, no exaggeration. I knew that the cores will be severely underutilized in the vast majority of applications, in the vast majority of the market. Since the market won't need full quadcore performance, the logical conclusion was to bet on practical approaches to the quad core issue, that is, multi chip processors. Either double duals, like Intel's, or four cores in a die and a large shared cache at an adjoining die. I also knew that the K8 architecture as it was had bandwidth a plenty and short enough latencies for quadcore processors in Master/Slave configuration of dual core dice. Then, the approach of the single die quadcores wasn't called for at all and that should have been more than enough to erode my confidence in AMD's plans.

But that is not all. Although very late, I saw that AMD was in denial of the threat of Conroe. Even though I heard Henri Richard to speak with deference about Conroe, that somehow AMD's management had internalized that the product was very threatening, that didn't express into any change of plans. AMD went ahead with all sorts of plans that assumed massive market share gains, including negotiating the New York fab, to consolidate flex capacity through Chartered, and to acquire ATI (that wouldn't have made sense if AMD would not be able to compensate lost ATI Intel-based business with extra AMD-based), so, the company greatly overstretched its resources anticipating a great demand that never came; but more than that, it was the absence of a contingency plan, AMD's management never cared to tell us, the people who care and supported the company, what it was going to do if Conroe turned out as good as it seemed; Management only spoke on dismissive terms about the threat. Improvement-less AM2 should have been another late warning.

While it is still a mystery for me why the company went the perilous single die quadcore route for no good reason, we can all be sure that it greatly contributed to the catastrophe the inflexibility of AMD's plans. And this inflexibility is inherent to the scarcity of resources to try experiments, business experiments, to explore the business space. Once AMD chose an strategy, there was nothing else to do but a prayer and to work as hard as possible to make it succeed, mid-term revisions were pointless. If you know that AMD is in "projectile" trajectory, that once it fires all is inertial flight, as I knew it was in April 2006, it was possible to determine whether it has reached a top or not -- it had, because the improvements of the K8 had become smaller and smaller until non-existent. Today, you may readily appreciate that AMD is in free falling, 'cos it fired the K10 and the shot fizzled, from here on, it is nothing but accelerating decline.

I have been referring several times to the discrepancy between my opinions that derived from fundamentals and the strategies decided by the management of both Intel and AMD; You may be wondering how to determine what is the superior analysis, because that is key for successful speculation, and here is how: Decide for the thesis of the most informed.

If you have enough knowledge to reach a conclusion from pure fundamentals, such as "Itanium is not possible to implement satisfactorily", "Single die quadcores are not necessary", then, in the absence of concrete evidence that contradicts conclusions from fundamentals, follow your instincts. I find it fascinating that a pedestrian may understand certain key issues of multi billion companies better than their managers, but it happens all the time. The reason is that there is a disconnect between management and reality. While from the point of view of software engineer you are seeing the real stuff, the real value of an architecture, the CEO, despite all of his privileged information, is not seeing the real thing, but third or fourth level interpretations (the opinion on the opinion on the opinion of someone about something) , and there may be interests to distort his information.

On the other hand, if it is something like "I think the P6 architecture is exhausted, that it is impossible to substantially increase its performance", but at the same time a huge organization like Intel does a 180 degree turn to commit to a P6 derivative architecture developed by a group of people out of the power rings of the organization, you can be sure that their architecture is so fucking good that its objective merits prevailed over the intense politicking of a big organization, that is, your opinion is wrong.

A closer example: When a national investment company throws 600 M$ to AMD when you think the company is doomed, who is right, the Arabs or you?: Answer: Think about "what do the Arabs know about the semiconductor industry?", "are they in the centers of power that decide stock prices, media spin?", and also: "Has this organization explored the semiconductor business?" if you get to the conclusion that it is not likely that such organization has privileged information, you may be right. It would be much better if you also had a model to explain why the organization put the money in AMD.

Sometimes it is a much tougher call. For instance, "will Microsoft succeed at DRM?" I meant whether Microsoft will succeed at becoming the de-facto multimedia distribution channel by temporarily jeopardizing the Operating System monopoly with DRM restrictions that allienate the customers. Microsoft is a company that routinely fails at home-grown initiatives, despite following many different routes or covering all the bases. This is evidence that although Microsoft thoroughly explores its business space, its "business cartography" doesn't make its way to management all the time. Why would that happen? If you watch the "developers" video of Steven Ballmer, you get a hint. And Bill Gates quotations about the internet are a famous example of business myopia -- This could be a problem of management personalities that do not allow information that contradicts them to flow. Looking even closer into Microsoft successes, such as the Internet Explorer in the browser wars, you may see that sometimes, when Microsoft is actually threatened, it does the right things; perhaps only when management is willing to admit being wrong, the company may capitalize its thorough knowledge of its business. The problem is that from the outside it is nearly impossible to know if the company is using the business cartography or not.

Apple Computer is another example: I may have the opinion that Mac OS X should be licensed to run in non-Apple personal computers, but I must be wrong: Steven Jobs surely has much better information about this topic, Mr. Jobs has demonstrated that he learned the lessons of his long penitence after being fired from Apple and losing an arm and a leg in NeXT, and Apple continually demonstrates how well it understand its business space. Thus, I have to keep studying Apple to improve my model of that company.

Going back to AMD and its management, it is clear that those guys don't have a clue about their business space. Once they got out of their traditional "value proposition" space, they made blunder after blunder:

1. Never capitalized on the enormous significance of AMD64 by continuing to partner with Linux to force Microsoft into promotion of AMD64 for all segments, beginning with mobiles [ what did it take to finance the development of Linux drivers for the few wireless chipsets that ran on AMD-based laptops? AMD could have become the "centrino" of Linux, and this would have induced multiple effects that would have turned AMD64 into premiums ]; this because AMD never knew how to behave like an industry leader when it had the undisputed leadership.
2. It tried to create the consumer market for coprocessors only too late and too timidly, while having had years upon years of all the elements for coprocessing in place.
   
3. It didn't capitalize on the desperate need that platform partners had to support AMD (because Intel is treacherous and tries all sorts of nasty tricks to block competition to get into its platform business). Contrary to all rationality, they went ahead and became the direct competitor of its second best partner (nVidia) and destroyed half the business of its fourth best partner, ATI. I think here that AMD's management were not ready for the big leagues. They were scammed by Wall Street into a disastrous acquisition the way hustlers scam the farm boys when they go to the big city
4. It showed that they were ignorant of how to deal with big OEMs because in periods of high demand for their products, rather than making lots of profits, the preference to OEMs expressed into the destruction of loyal, historical and natural channel business and losses!, then, they fell in the trap of overproduction instigated by the OEMs to have cheaper products.
   
5. Having gambled the company with the "triple challenge".

Business Space Exploration has a cost and an expected benefit. The cost does not increase with company size, the benefit gets multiplied by company size: It is a much better option for large companies than it is for small companies, another form of economies of scale. For a company as small as AMD, and being so expensive to explore the market with several architectures, it is not cost-effective for AMD to explore its business space. But this doesn't mean that small companies don't have a chance: On the contrary, they should have the advantage of having their management closer to reality, that is, a better chance to succeed following best principles. When you see a small company like AMD straying from the best principles (such as going the route of the triple challenge), "short" the stock, statistically you will succeed.

P6 Line:
Pentium Pro, Pentium II - Klamath, Deschutes, Tonga, Dixon, Xeon Drake, Pentium III - Katmai, Coppermine, Tualatin, Xeon - Tanner, Cascades, Pentium M - Banias, Dothan, Yonah/Xeon Sossaman, 'Core' - Conroe, Allendale, Kentsfield, Woodcrest, Clovertown, Tigerton, Harpertown, Merom, Penryn, Yorkfield

Phenom

I said that Barcelona (and Phenom) as a strategy implied absolute confidence to succeed at three important challenges:

1. Extraordinarily good 65nm silicon process, to try to close the competitiveness gap to Intel
   
2. A new architecture developed without the help of a thoroughly understood process
   
3. The single-die quadcore feature that implies a hit of yields and especially binsplits
   

Since it is now very clear that AMD failed at all three, it is easy to find articles in the press that detail the situation, and I would like to compile some of them.

Adrian Kingsley-Hughes writes "AMD's Phenom - For suckers only". There we find a reference to "Tom's Hardware" that demonstrates that the 6400+ X2 (3.2 GHz, 90nm [you may go here and select the 6400+ model to confirm the specifications]) beats the fastest Phenom, the 9600 2.3 GHz at a variety of tests. That is, even today, a year after the launch of 65nm product, it is the 90nm products the ones that have the performance crown of AMD. No wonder that the highest selling price processors [AMD's official price list], both Athlon and Opteron, are all 90nm. Not only the 65nm processors are slow and the company sells them on the cheap, but inexplicably, the 65nm K8 are an involution compared to the 90nm, even taking into account that the company has five and more years of experience with the K8 design. The 65nm is not slightly better, but slightly worse, AMD cut corners like increasing the L2 cache latencies.

Rumors have surfaced regarding bugs in the K10 architecture that have delayed its introduction [example]. AMD has had to develop the silicon process at the same time it tries to debug the new architecture, that's the recipe for low yields, unacceptably slow speeds, and late introduction. There are good improvements in the K10 architecture, but I think the existence of a third cache level could be the culprit of the K10 lukewarm performance: The K8 had a an architecture of two levels that due to the exclusivity of the L1 resembled more the delays of a 1.5 levels, but now, rather than having a large shared L2 cache, as the successful Intel approach demonstrates, the K10 has three levels. Why? my speculation is that a quadcore design requires a large shared cache and I think AMD didn't dare to try this radical change at the L2, so, it came with a third level that offers dubious performance advantages. Do you see? A shared cache is more natural in a single die design, yet, AMD has insisted in a less efficient independent L2 and that forced it to introduce a third level, shared, creating an inefficient three level hybrid.

We also know that AMD will launch triple-cores, speaking volumes about its dramatic failure at the challenge of single-die quadcores. To further illustrate the principles that dictate exponentially worse yields and binsplits in single-die multicores, AMD is launching an overclocking application that allows the user to control individually the speeds of every individual core.

Yet, AMD didn't need to to follow this route at all. It could have developed 65nm not with the intention of increasing numbers but premiums. AMD speaks of "Asset Light" today because it has plenty of production capacity of low performance products of which the market is saturated but doesn't have any high-premium product; perhaps because AMD saw the 65nm process as a tool to minimize production costs and increase production volumes rather than the process for the new generation of flagship products. The emphasis on volume/cheap production costs rather than performance while developing the 65nm process may have its origins on AMD's "pharaonic" plans of having to supply all the OEMs with plenty of product, especially the production capacity increase that Dell meant. Perhaps performance had to wait. But not even that strategy worked: we know what happened when AMD, a year ago, gave preferences to Dell and other OEMs rather than the channel: the destruction of the loyal and natural businesses of AMD.

AMD didn't need a new architecture to market quadcores, it had several MCM options at its disposal. It is clear today that the excellent interprocessor bandwidth of DCA and CCHT would have been more than enough to have processors with two dual core dice in which only one has interface to memory and the other communicates through CCHT. Actually, AMD had every advantage to put quadcores in the market before Intel; but of course, the company decided the strategy of skipping all intermediate steps for the big leap of the single die quadcores and this catastrophe happened.

Also, the company may have opted for a new architecture that actually increased performance. The most pathetic thing of all is that K10 quadcores, even having the large advantages of single dieness integration and point to point (busless) interprocessor communication, is actually SLOWER per clock than the Intel double dual kludge. When you try not to improve performance, but to solve the problems that derive from single-dieness, you may end up with an architecture that is good for nothing.

Adrian Kingsley-Hughes again: "So really, what’s the bottom line? AMD have put time, effort and truck loads of dollars into developing a quad-core processor that really isn’t that good".

Now, let's look at Phenom versus Intel products:
Anandtech (referenced by Kingsley-Hughes): "While AMD just introduced its first 2.2GHz and 2.3GHz quad-core CPUs today, Intel previewed its first 3.2GHz quad-core chips", "Intel is currently faster and offers better overall price-performance (does anyone else feel weird reading that?). Honestly the only reason we can see to purchase a Phenom is if you currently own a Socket-AM2 motherboard".

Tarinder Sandhu @ HEXUS.net (also referenced by Kingsley-Hughes): "We've disseminated all the various enhancements that make Phenom a better clock-for-clock proposition than Athlon 64 X2. We've identified that the design is elegant[.] But what we've also seen is that AMD cannot match the clock-speed of Intel's slowest quad-core processor and, worse still, can't match Core2 Quad's performance on a clock-for-clock basis either." and "the Spider platform - where AMD tries to harness the innate synergies of its processors, chipsets and GPUs - can be bettered by a mix-and-match assortment of Intel and NVIDIA" -- so much for the "synergies" of the ATI acquisition, over a year later, there is unanimous agreement that Intel+nVidia is superior.

But the real problem is not that Phenom (and Barcelona) stinks: Intel is busy finishing a new busless platform and architecture. AMD demonstrated that most of DCA and CCHT are overkill for the vast majority of computers, that is, Intel doesn't have to do something as fancy as DCA and CCHT, but something just good enough to get rid of the most important limitation that their architecture has: The front side bus. Also, from the "pure muscle" point of view, Intel is already putting processors with metal gates and high-k dielectrics (that is, much more efficient and faster) while AMD is still trying to catch up to its own 90nm!; so, the competitive position of AMD will become worse, much worse!

Jason Cross @ Extremetech (also ref. by Kingsley-Hughes) mentions this in passing: "As Yorkfield CPUs mature and come down in price, the only way for these Phenom chips to compete will be to offer much better clock speeds without blowing out the power envelope, and they won't get there on 65nm. AMD simply can't afford to let Intel's Nehalem redesign hit the market, mature, and come down in price before bringing out a wide range of 45nm Phenom CPUs."

I think that nobody should be talking about AMD's 45nm products when the company is still flunking repeatedly the 65nm grade.

Anyway, regarding AMD's future, things are turning hopeless: It can't get rid of the fabs it owns due to either x86 licensing restrictions or contractual obligations with Dresden, thus, no "Asset Light", but expensive Fabs that will be less and less competitive to what Intel is doing. nVidia keeps getting ahead relentlessly in the graphics business while ATI is still shedding Intel-based market share and no synergies in sight. AMD can only move product on price, but it is already enduring losses of nightmare; all while Intel comes with vastly more competitive products and AMD already used up its best ammunition...

Vista Failure: A reason for celebration

Apple is selling record numbers of computers, it has gotten to 8% market share. Ubuntu launched "Gutsy Gibbon" with the cool 3D interface Compiz Fusion, Ubuntu also cracked Dell and is now a preinstalled O.S. in Dellland, users all over the world keep demanding XP in their computers rather than Vista, which still is plagued with incompatibilities, even 100% userland applications like Firefox are able to "blue screen of death" it, and I am still thinking of Jim Louderback, one of Vista's major media cheerleaders deserted it.

Despite all the media spin [ that I will speak about ], we can say that Vista is a failure and Microsoft's insistence in shoving it to users is creating so much frustration that many users are divorcing Microsoft to discover that Mac OS X is very cool and that Linux is actually usable.

Why is Vista so unsuccessful?

In the above link [ incompatibilities ], we begin to get an answer: Vista requires to do things differently, both for users and vendors.

It could be said that this is the price of any progress, but is Vista any better than, let's say, XP? There are many ways to compare how good (or bad!) Vista is relative to XP. Is it easier to use? faster? allows better hardware? is it at least less vulnerable to virii and worms and all kinds of nasty intrusions?

My wife uses computers 100% of her working time, although her work is not technical, she is just a user. Since her old laptop wasn't up to her demands, we bought an excellent HP Turion dual core with 2 Gb of Ram around February. Naturally, it came with Vista Premium preinstalled. Ever the techno-adventurer, I advised her to try to get used to the new way to do things in Vista that she may ultimately like it, because if she ran into trouble, I was volunteering to help her (so that I could have first hand Vista experience). Well, it didn't work for her, she got tired of not having the things were she was used to for no good reason. In the absence of any benefit, there was no reason to insist in Vista's, she asked me to install XP. Oh! amazing!, the speed jump was extraordinary, really! I had no idea how fast, smooth, responsive, this laptop could be.

Peter Guttman explains in full technical detail what's the matter with Vista's performance. The problem is that Vista spares no effort to control the user, it makes so much effort on enforcing the restrictions on usage that media companies demand, that it renders the Operating System, performance wise, defective by design [ I like the phrase very much, you may also go to the site ]. The computing power is spent distrusting the user, distrusting what he installs in the computer. That's why it is inherently slower and requires more resources (computing power, memory, disk space, etc), not to please the user, but to restrict him more effectively.

With all the distrust even among hardware devices in the computer, to the point that if Vista doesn't like a device then it sends "tilt bits" that command all other devices to cease to function; naturally the drivers are also harder to make; so, like [ incompatibilities ] tell us, companies that otherwise might offer drivers for the new Operating System for products just one year old, may not even bother, too hard. Others, less smart vendors, may think that since drivers for Vista and older Microsoft Windows are so different, and supposedly Vista is the future, then they shouldn't even bother to develop the drivers for the older Windows.

The same situation regarding hardware drivers apply to Vista applications, albeit in a not so acute way; but Microsoft insists at it: Microsoft refused to back port DirectX 10 to XP, and it argued many excuses, but in the end, it is all bullshit:

For instance, like "The Inquirer" reported in July, [ thanks sgrady @ investorvillage ], apparently good technical reasons like the incapability of XP to virtualize memory prevented XP from being able to run full specification of DirectX 10. But since nVidia sort of never really cared much about DirectX 10 [ opposed to ATI that bent over backwards and got out of its ways to be the prime partner of Microsoft with Vista and DirectX 10 ], never implemented this feature, so, what did Microsoft do?, it made memory virtualization optional [ tossing away ATI's extra effort ]. So, Microsoft compromises everything to get nVidia on board with DirectX 10, but XP compability? out of the question. This demonstrates that Microsoft routinely exercises its power over its users, treat them like pawns.

Microsoft promised that Vista was going to be a secure Operating System, and it really had it going to become a secure O.S., after all, the fundamental principle of its construction was distrust.

But just like repeated accounts report, Vista crashes very often. The dim-witted Fuad Abazovic generated news by blaming Firefox 2.0.0.8 on Vista blue screens of death. The guy is a moron, because in no way it could be blamed an application that doesn't have any privileged driver code, totally "userland" like Firefox, for any Operating System crashing; on the other hand, if decidedly non-malicious userland applications may drag Vista into a blue screen of death, what is possible for malware?, that's the real news.

Userland applications crash Vista. It can't be any other way. I've spoken repeatedly about the architectural deficiencies of Windows [ you may read the articles indexed by this post ], so no point in repeating them here. While Vista can be very obnoxious in restricting the users, it is the same shit when it comes to protecting him from malware. So, I must amend my previous assertion that the fundamental principle of Vista is distrust to make it distrust of the user!

Media Spin

In our technical world, Microsoft is a giant. Naturally, media companies must bend their ethical principles of journalistic integrity to the practicalities of marketing dollars. I think no magazine as big as PcMagazine may be as big without Microsoft money. Since they can not outright lie regarding the true merits of Microsoft products, because they would lose credibility, then they do the next best thing: to sugar coat as much as possible the shortcomings, to emphasize the few advantages as essential, to discredit criticism.

I invite to read Jim Louderback's farewell editorial in PcMagazine, even though it dates to August:

I've been a big proponent of the new OS over the past few months, [ and very vocal, being the editor of PcMagazine, ] even going so far as loading it onto most of my computers and spending hours tweaking and optimizing it. So why, nine months after launch, am I so frustrated? The litany of what doesn't work and what still frustrates me stretches on endlessly.

Take sleep mode, for example. Vista promised a new low-power sleep mode that would save energy yet enable nearly instantaneous resume. Poppycock. The brand-new dual-core system I built a few months ago totters off to sleep but never returns. I have to cold-start it to bring it back. This after replacing virtually every driver inside. It's gotten so bad that I've actually nicknamed it Chip Van Winkle [ a mention to the fictional character "Rip Van Winkle"]. And I've nicknamed my primary Dell notebook Philip Marlowe [ the main character of "The Big Sleep" and "The Long Goodbye" ].

But it's not just the long sleep. My home notebook acts as if it comes from Starbucks rather than HP [ that is, very hot? ]. It used to snooze—but now, after a recent Vista update, it never goes to sleep at all. Its new nickname: Compuccino

I've never read such a devastating critique of a flagship Microsoft product by someone as encumbered as Jim Louderback while editor of PcMagazine, I find no coincidence on the fact that he was leaving, on the contrary, I think the very reason we could afford such "sincerity" was that he cut loose, at least temporarily, from Microsoft advertising budgets.

The [ incompatibilities ] article mentions something very worrysome: Products certified for Vista don't need to be full-featured in Vista, they merely must be able to offer any functionality. That is misleading, but both vendors and Microsoft are partners in this scam. In any case, this is more marketing spin, another example of how it is possible to bend the facts to make them fit into a description like 'Certified for Windows Vista'.

Please, dear visitor, do not fall into the media spin/marketing trap!

Celebration

In any case, Microsoft wields a lot of power over us and we are in varying degree forced to use whatever it wants us to use while waiving rights in the process. This power stems from the mass of users, and that's where Vista helps, because it is forcing users to look for alternatives, and the users are actually finding them.

In a previous article I explained that Vista is Microsoft's gamble to become the de facto distribution channel of multimedia. The strategy is more or less as follows: There is a phenomenon of convergence in which people is increasingly enjoying multimedia through a computer, but the market hasn't saturated, thus there still are huge opportunities there. To become the primordial distribution channel of multimedia, Microsoft sells to the media companies the illusion that the usage of the content will be as restricted as the media provider wants, thus the emphasis on distrusting the user. Then, the media companies will buy the illusion, and Microsoft will become the primordial distributor. I will next explain that it is a given that Media companies are as stupid as to buy the illusion; the challenge in Microsoft's strategy is that the restrictions will necessarily alienate a large portion of its users; thus, Microsoft is risking its monopoly position to become the primordial media distribution channel.

The media companies are as stupid today as they were when the studios gave Macrovision the complete monopoly on DVDs, in fact, for the most part, they are fighting teeth and nails the technical changes that have obsoleted a great deal of their business practices, buying legislators left and right and promoting aberrant laws that are causing great harm wherever they are enacted; but that is not a problem for the rest of the world, because, as I explained before, this is a process of natural selection, those who are incompetent to live in a world in which bits move freely will be displaced by those who know how to profit from free movement of bits; to fight the free movement of bits is ultimately futile.

Incidentally, all of these topics are important regarding ATI/AMD, Intel and investment in other technology companies. Regarding ATI/AMD in particular, I have written in several occasions: 1, 2, 3

I must thank Jonathan Schwartz [ CEO of Sun Microsystems ] from convincing me that the future is not as gloomy as I though it was, with Media companies purchasing legislators to take essential freedoms away from people. The following words awakened me to the realization that those who fight technical developments will just be displaced, from his blog, "Better Honest Than Polite":

I found myself talking to a group of media company CEO's. I asked a simple question, "do you have a general [legal] counsel reporting to you?" The answer was universally, yes.
[...]
But then I asked a harder question: "Do you have a chief technology officer reporting to you?"
[...M] ost did not[, w]hich seems backward for a media company. Why?
Because convergence isn't a legal phenomenon. It's a technical and social phenomena first and foremost - that's why you can't talk about media without talking about software (what is an MP3? AAC? Java? Flash?). You can't talk about distribution without talking about free media, social networking or mobile devices (technical assets that reach more of the planet than all other network outlets). Ask Eric [Schmidt, CEO of Google] or Terry [Semel, Yahoo] (or Steve [Jobs, Apple?] or Mark [there is another Mark, Shuttleworth, Ubuntu] if they have CTO's reporting to them. Of course they do, they're media companies using technology to win. Or vice versa. It doesn't matter, they've converged.
Which brings me to a simple, and heretical conclusion - for which I'm sure I'll be apologizing for years to come. But I'd rather be honest than polite.

Media company CEO's without a CTO on their staff should prepare to be acquired or broken up - they are fighting the future rather than monetizing it. [ My emphasis ]

Everybody wants to use computers to enjoy multimedia, audio, video, games, and they are the natural device to enjoy content: Play it whenever you want, the fragment you want, with whoever you want, etc. that can only be accomplished by programmable, configurable, general purpose computers. Nevertheless, media companies think that people is going to use computers for purposes at which mono-application devices such as a TV set are better suited...

Really, there are reasons to think that enough users are discovering that Windows just doesn't work. Windows is a phenomenon of mass-conditioning of people. People has been conditioned by Microsoft to accept that computers crash every once in a while. That they must protect from Virus. That they are cranky and complicated.

Mac OS X dispels all of those assumptions, so, I guess that other than being locked by an abusive vendor as Apple into a non-mainstream Operating System and its lack of choice, Apple computers are superior to Microsoft. And there is yet another option, to roll up the technical sleeves and go Linux.

Under the hood, both Mac OS X and Linux are Unix. I have been trying to track a phrase that I attributed to Ken Thompson, that in the early eighties was asked what the Operating System of the new millenium was going to be, and he replied that he didn't know what the name was going to be, but that for sure it was going to be Unix. Operating Systems is something that was figured out over three decades ago, it is Unix. Just like Henry Spencer said, "Those who do not understand UNIX are condemned to reinvent it, poorly", but of course, Unix has a catch: It appeals to the technically oriented people, because it is them who can make the most of it and that makes it disagreeable for the less technically oriented. Ultimately, it doesn't matter, because the technically oriented people, thanks to the innovation of the Free/Open Source model for Software Engineering, end up developing Operating Systems and applications so good that they inexorably displace the applications developed through less efficient models [ Note: Mac OS X has roots both in the classical Unix tradition that in modern language would be called Free/Open Source; is itself a derivative of Free/Open Source Operating Systems. ].

With users increasingly aware that computers may "just work", a small migration of users to Unix/Linux may empower the developers of Free/Open Source software with more market awareness, and more money. Those extra resources may express in increased migrations; that is, a virtuous cycle that may turn into a runaway growth of software and freedom development. To be able to see the dawn of a better era is a privilege worthy of celebration.

MOZ_NO_REMOTE

[ UPDATE 10/23 ]
A friend told me about the command line option -no-remote documented in http://kb.mozillazine.org/Command_line_arguments that does the same thing the environment variable does. This is much more practical because it doesn't mess with the default configuration. I am still investigating why this option is called the way it is called and official and complete documentation


There is a wonderful feature for Firefox that allows to run several firefox processes, each with its own User Profile, in the same Windows/Linux. The keys to the multi-process/multi-profile firefox heaven is the environment variable 'MOZ_NO_REMOTE'.

Firefox (Mozilla) is capable of managing several user profiles. The same user may want to have several user profiles or may want to run simultaneously several Firefox processes:

• Someone interested in testing different versions of Firefox may want to run them all at once to better compare.
• Someone that uses a firefox profile stored in a flash thumb drive, so that he can have his same bookmarks, cookies, passords, etc, with him everywhere he goes, in any computer he uses.
• Sometimes, he may not want to use a profile that contains cookies or passwords to visit other sites for security reasons.

So, it may be cool to have more than one user profile. And if it is possible to run several user profiles at once, then you can customize them in very interesting ways.

For instance, I have a user profile with numerous plugins installed, that I use when I want one of the features of the plugins, but I seldom use it because it is slow and clunky (too many plugins), so, I have a 'light' profile for most of my usage.

You may run several processes of Firefox simultaneously by setting the environment variable 'MOZ_NO_REMOTE' to one. In a DOS/Windows command line '.bat' file, you can do something like this:

Set MOZ_NO_REMOTE=1
*path to firefox*\firefox -ProfileManager
Set MOZ_NO_REMOTE=

The '-ProfileManager' is necessary because every simultaneous Firefox process needs its own profile, so, this will display the profile list to create/delete/select a firefox profile.

Note that there is no assigned value to 'MOZ_NO_REMOTE', this deletes the variable from the environment.

But nobody I know likes the ugly black command line window to be opened while firefox is running. There is an option, but it is more complicated:

You can use Windows Scripting to set the environment value before running 'firefox -ProfileManager' in a simple Javascript file:

var shell = WScript.CreateObject("WScript.Shell");
var env = shell.Environment("User");
env("MOZ_NO_REMOTE") = 1;
shell.Popup('Enabling MOZ_NO_REMOTE');
shell.Exec('C:\\Program Files (x86)\\Mozilla Firefox\\firefox.exe -ProfileManager');

[ DO NOT FORGET TO CHANGE THE PATH TO YOUR INSTALLATION OF FIREFOX ]

And save this as a file 'ON.js'. To use this script, just doubleclick on the file.

From that point on, every time you double click on 'firefox.exe' or any of the shortcuts to it you will open a new Firefox process. If you want to open more windows from a particular Firefox process, do Control-N or the equivalent, all the windows and tabs opened from a Firefox window will run within the same process.

If any other application wants to open a firefox, it will be another process, but it will fail. It will fail because firefox tries to open the last profile used, but since the last process is still using it, the profile is locked. But remember, you may still open as many windows and tabs from within every process.

To allow other applications to open firefox windows, you have to delete the MOZ_NO_REMOTE variable:

var shell = WScript.CreateObject("WScript.Shell");
var env = shell.Environment("User");
env("MOZ_NO_REMOTE") = '';
shell.Popup('MOZ_NO_REMOTE cleared');
shell.Exec('C:\\Program Files (x86)\\Mozilla Firefox\\firefox.exe -ProfileManager');

That would be 'OFF.js'

It is necessary to open a new profile because the firefox window that other applications may want to open will try to use the last profile, that is locked by the last firefox process, but even if you close this final Firefox process, from then on the default will work without trouble.

This may be a little complicated to grasp the first time, so, feel free to ask questions.

COMCAST is the end of the Interregnum

Interregnum:

#2: a period during which the normal functions of government or control are suspended

There is important news today that it has been proven that COMCAST disrupts on purpose Bittorrent and P2P connections. The way it does it is to impersonate P2P hosts and send close connection messages.

We are getting to the point in which the Internet Service Providers assume the right to profile the kind of network traffic they allow to their subscribers, and this is the end of the internet. From then on, it will be intercompany.

Let us recapitulate: The internet became the phenomenon it is today because it just moved bits from one end of the net to another without restrictions, which unleashed a gigantic creative wave on how to make the moving of bits useful. Now there are so many applications that make it so useful to move bits, that governments and companies feel that there is no need for neither more creativity nor more usefulness, but more control and more profits.

In the times pre-internet, everything the citizen could use to be informed was mediated by governments and publishing/media companies. The advent of the internet gave a real chance for the communication of subjects and ideas that were not considered important by governments or companies, or even worse, communication of subjects and ideas that governments and companies actively wanted to prevent.

Actually, Publishing and Media companies can not exist in opposition to governments[1], and the politicians that get to become the governments can't get there without media endorsement, so both Publishing/Media companies and the government are the same for the purposes of this article.

Since the internet, because it is a space of freedom, is full of ideas that governments/media don't want to circulate, the freedom of the internet is their enemy.

Up until now, the internet was resilient, because in the words of John Gilmore, the internet interpreted censorship as damage and routed around it. But what if the censorship entity is so big that it can actually impede the re-routing?

I think that when COMCAST decides to disrupt bittorrent, it does it as a result of a calculation: Is COMCAST big enough to impede the internet to route around it when it tries to control what their subscribers may or may not do with their connections? and their calculation is that COMCAST is big enough. Perhaps not COMCAST alone, but together with other internet carriers and government laws that won't defend the freedom but instead to enshrine the principle that the owners of communication channels may filter the communication that takes place through their channels any way they please. That would be ok if at the same time there was legal protection for the creation of independent internet carriers, but there is not. Remember that AT&T was the archetypical example of monopoly. It was broken up in pieces, and guess what? the pieces reassembled themselves into pretty much the same monopoly... So, what freedoms are the governments to protect: Those of the channel owners to do as they please with their channels, or those of the citizens to have communication freedom?

Since there was a period of internet flourishing when governments couldn't control what people communicated, there was an interregnum of creativity, that sadly, is on its last legs.

It may be interesting if a big player such as Google decides to leverage the existing resilience of the network by, let's say, becoming the last freedom internet carrier itself. That may happen, and since the principle that dictates that in the internet damage is routed around is still very strong, it could lead to huge profits. But do not misunderstand the possibility of Google taking on the defense of freedoms as evidence of their resilience, in the end, it will make more economic sense for Google to capitalize by exploiting the network rather than to allow it to keep growing. The only possibility to save freedoms is to defend them directly the same way other freedoms have been defended, that requires understanding of their value. Remember the words of Judge Dalzell writing the three-judge panel decision on the subject of the CDA in 1996 [next to last page]:

The Internet may fairly be regarded as a never-ending worldwide conversation. [...] As the most participatory form of mass speech yet developed, the Internet deserves the highest protection from governmental intrusion.

[1]: Take the example of television: The radio frequencies for Television are property of the nations, that is, the governments. It frequently happens that governments use their ownership of radio frequencies to blackmail companies into editorial lines of their liking. The process doesn't have to be as clumsy as in third world countries, it can be very subtle as it happens in the industrialized nations. There are degrees, though, it may actually happen that some publishing media can really work independently of government, fortunately.

AMD reported, I don't have much to report

AMD did better than expected, losses not as terrifying as expected, 7% improvement in Gross Margins, a bit of market share gained in both mobiles and desktops, lost market share in servers.

The market was indeed strong.

What's happening?

The market wanted lots of computers and people is not caring about the Intel brand, since AMD processors are cheaper, but perceived as perfectly comparable to Intel, they have some demand strength.

Does this mean that AMD is on its way to survive? -- No. Let me explain why:

For Intel is very expensive to asphyxiate AMD in a price war that needs to be fought in all segments, and Intel's management may feel the pressure to just increase short term profits. This is a reasonable moment to dedicate to profits, because AMD is lagging behind in competitiveness in a definitive way. The strategy for Intel is very simple: To grind AMD with the economies of scale. They are about to launch 45nm high-k/metal gate, and then 32nm in immersion process. AMD flunked the 65nm process and only will have immersion for 45nm... not significantly better transistors. Like I've said many times before, Intel then will get rid of the FSB/MCM disadvantages, and AMD will be a sitting competitive target.

AMD is losing money at a terrifying rate, and there is no plan to return to profitability. There are no competitive products in the roadmaps. This company is still as inviable as it was yesterday, despite a good quarter.

The stock price? -- good to take bearish positions little by little.

Nothing to new to say.

Going to AMD's Q3 Earnings Report

AMD's Management promised a radical transformation of the company in Q1's CC. Did it happen? -- No.

Management also talked and talked about 'Asset Light'. Is any of that talk materialized in policies or strategies? -- No.

According to the numbers in Google Finance, AMD gained in equally spaced periods of 13 weeks, 89 millions in Q2 '06 (net income), when Athlon X2 was king and Intel didn't have but pitiful Netbursts and 32-bit Yonahs to compete. The inertia helped yet another quarter, 136 millions in Q3. By that time, ATI was already acquired, and then it followed losses of 574 millions in Q4 ($1.08 per share), 611 millions ($1.11 per share) in Q1 '07, and $600 millions ($1.09 p/share) in Q2. According to AMD's investor relations numbers, the losses in Graphics and Consumer Electronics accelerated in the same period.

Just like it was predicted in this blog, Barcelona was launched and disappointed in many ways: Late to launch, small numbers, slow clocks; even having the single die/Processor to Processor interconnect advantages it is barely at par in instructions per clock to Multi Chip Modules/Front Side Bus-choked Core processors. These products are so mediocre that in fact the top of the line dual core Opterons have far higher absolute and relative prices, according to AMD's own price lists. Furthermore, there is no high speed 65nm processor model in AMD's entire lineup, the consumer quadcore products are being pushed to 2008, and AMD dared to market triple-cores. That is, there is a mountain of indications that AMDs 65nm process sucks big time. And there doesn't seem to be any enthusiasm for Barcelonas among OEMs, so much for the often repeated talk of eagerness of customers. I invite the dedicated researcher to read the transcript of Q2's Conference Call, there you would see the 'alternative reality' of Mr. Meyer, President, and Dr. Ruiz, Chairman and CEO, who reiterated how wonderful the yields at 65nm are, and how extraordinarily good the 65nm process is that it allows the company to close Fab30 (that is, to cut the necessary expenses to convert Fab30 into Fab38).

On the other side, Intel has leaped forward in semiconductors with the double-punch advancements of High-K (dielectric constant) gate insulators (that allow thicker gate insulators than 5 molecules of Silicon dioxide while allowing the same electric field effect [insulator thickness is important because at these quantum physics scales the electrons are probabilistically simultaneously at both sides of the insulator, so there are leakage currents that grow very fast the thinner the insulator is ]) and metal gates, that increase the density of electrons in the gate and favors faster switching [ see IEEE Spectrum article ]. Also, Intel already announced products that will eliminate the disadvantages of the Front Side Bus. Since AMD's Direct Connect Architecture never was taken full advantage of, I think it doesn't take a very sophisticated P2P/Integrated Memory Controller architecture for a performance jump, that is, just a reasonable implementation of Processor to Processor interconnects will be enough to significantly improve the competitiveness of Intel's processors.

In the graphics department, AMD has lost more where it hurts most, in the mobile segment, and elsewhere, giving nVidia a feast of profits and market share gains.

AMD won't bring competitive products in the foreseeable future, and this is not speculation, just plain official roadmaps. Intel is zooming, with 45nm, high-k/metal gate, processor to processor interconnects, integrated memory controller.

Thus, AMD is conceding territory at everything high-end and going back to its unprofitable existence of value/volume player, the only difference being that now it is a supplier of all the major OEMs, and thus its market is less flexible and the losses are larger. The only way to hold on to market share is by selling cheap, but since the processor is turning less and less a cost component of a computer and as much a determinant of performance, at the low end of the performance spectrum it is less and less attractive to save a few dollars in a processor, that is, the low end of the market is becoming more price inelastic, and that means that price cuts to stimulate demand hurt more total revenues.

I am very eager to see how the losses of AMD have decelerated in this quarter, but what we are seeing is an inviable company: It can not produce more because it just doesn't have the products to drive market share expansion, it can not produce less because then it worsens its competitive position being weaker at silicon process development and manufacturing because less production heightens the economies of scale disadvantage in R&D; the company has rotated not just once, but TWICE! the debt it took to acquire ATI: 2.2 giga dollars in April and 1.5 giga dollars in August, that is, about half its present market capitalization value. It is important to notice that in this milenium, AMD has never earned more than $0.37 per share in a year, and lost ten times that, $3 per share, this year. I treated these themes in many posts, including 'Long year', January, 'Disaster', 'Catastrophe', and 'The ATI acquisition' back in April, and especially 'Does AMD know what it is doing?' in June, the historical perspective is particularly hilarious -- I am getting back on track, making predictions that actually turn true!.

Fortunately, the market for computers is strong, so, AMD may have experienced a break this quarter. How good would that have been? I can not say what is going to happen with the stock price from tomorrow on, not even if I knew exactly how much AMD is losing; what I know is that with patience, increasing bearish positions on AMD, the reality that this company is not viable long term will impose over any temporary stock price strength. And this may be the only way, patient and bearish, because Wall Street has every chance to know intimate financial details of AMD given that AMD will have to go cap in hand to Wall Street to borrow money to finance its inviable existence, and that will confer lots of opportunities to Wall Street to manipulate this stock price with obscenity and impunity; and on the other hand Intel will hold the keys for AMD's annihilation in the form of pricing and roadmaps; thus, there is no way the non-informed of privileged insider data could successfully day trade this stock.

Although not financial and not technical, there are very positive news coming from AMD, though. AMD decided to release specifications to enable Open Source drivers for its video cards. I celebrate this decision, but beyond my personal preferences, I think this is the correct strategy: Ally with entities with stakes in innovation, and not with status-quo maintainers like Microsoft and DRM, but that would require another post.

Alive!

In case you are wondering about this blog, it is still alive and I will keep posting, just that I haven't devised a plan for it: mission, audience, editorial line, content and resources.

I started this blog in January 2006 as an experiment. In November '05 I decided to invest my savings in the stock market because there was what I thought the opportunity of a lifetime, to invest in AMD bull-side before the whole world discovered and understood the technical superiority of its products, that was so great, that it will lead to an historical role inversion between AMD and Intel. By January I was inspired by Sharikou's blog, as an opportunity to express authentic opinions, not toned down by 'political correctedness' or other considerations, I got to see that regardless of how complex a subject may be, like comparing architectures of processors, it was in principle possible to gather together an audience/community to circulate ideas and to develop them.

Early enough I realized that the blog that inspired me for my own effort wasn't just a free expression of opinion, but that it gravely suffered from lack of intellectual honesty. Then it came the great dissapointment of losing money and credibility by the disastrous turn of events after the announcement of Intel's Core architecture; and once I realized that the same reasons that led me to invest in AMD-bull side, an exponential growth, could lead me to the opposite if the crucial parameters were slightly lower, indicating an exponential implosion. Thus, I 'flipped', and allienated beyond the point of reconciliation the core of the audience of this blog. Then, I got interested in the subject of volatility management through equity options, and that further allienated the audience. It gets even worse: the community I was participating in, that fed traffic to this blog, the Yahoo message board, underwent a fork after the change of format, and my faction, the more educated and seasoned participants, successively moved a second time to Investor Village; but that is not all, since the more educated and seasoned participants of the AMD Yahoo message board were naturally very entrenched die-hard supporters of AMD, they gave a very optimistic bias to the board, and after the successive rounds of AMD crashing and burning, the bias depopulated it.

For those reasons, this blog, that began as a project to complement a community to develop ideas around the topic of technology investment, turned into a personal project, even intimate, without a clear content orientation; and this evolution highlighted several issues: If I am going to have a low-traffic blog, there is no reason to put up with the very annoying inconsistencies of blogger/blogspot or any other free blog service, I could mount my own domain and use the tools that better suit my purposes. Another thing is the issue of privacy: A more personal project may require to lose privacy, but since I am a professional that has been called and may be called in the future by Intel, AMD and other companies, being publicly associated with very controversial or critical opinions hurt my possibilities to work, and hurt more where I am more knowledgeable/skilled and thus more opinionated... Finally there is the issue of content: What's the community of ideas that this project will concern itself with?

I have been meditating about these issues for a while and chose to slow things down to a 'hybernation rythm' while I am undergoing important personal and professional changes to see where are the strengths of this project and where they may go. Fortunately, I am at an advanced stage on these transitions and the panorama is becoming clearer. The visit statistics tells me that there is still a worldwide audience for this project, I am still participating in fora, and there are mountains of good content to publish, so, I can say that for the time being this project will continue to be alive and developing links.

The Return of Hyper-Threading (Technology)

When one sees the comparisons between the upcoming AMD processors and Nehalem, many people seem to forget that Nehalem will mark the return of Hyper-Threading Technology (HTT for short). I know that the first instinct of some of the readers will be to laugh at this, and say that HTT failed before and will fail again, but bear with me, as I try to show you why this may be more important than you think.

HTT is just the commercial name Intel gives to their implementation of SMT (Simultaneous Multithreading). SMT was first researched by IBM in 1968, and saw its first implementation in a commercial microprocessor in the Alpha EV8 (never released). Other processors with SMT include the PowerPC G5 and the SUN Niagara. So now you see HTT is not a dumb concept invented by Intel.

When Intel released the first implementations of HTT, depending on the application, you could get a speed boost from 30% to ¡¡¡-30%!!! (yes, that is a minus).. Latter designs improved the situation yielding gains from 0% to 30% depending on workload (in both cases compared with a P4 with HTT disabled). Intel Indicated that, in the P4, the increase in silicon area to include HTT was around 5%.

¿So, why Intel incorporated HTT in the processors? A few of the reasons are:
* The P4 had really long pipelines (way too long in my opinion, but that is easy to say now in 2007). By putting HTT there, the processor could do useful work in case some execution units where idle, masking a little bit the long pipeline problem. Oh, and memory latency is always a problem for any µProcessor manufacturer.
* Intel is interested in selling more microprocessors, so even if they did not believe in multicores (at the time), they would have loved (at that time) to sell something like AMD’s 4x4. But, without the software makers getting serious, that was not possible, HTT was a cheap way to get “Multiprocessing” to the masses, to let people see the benefits, and to let developers have a test bed of sorts where to try multithreaded code. Actually, HTT is credited with finally forcing Creative Labs to correct the SoundBlaster drivers to work in machines with more than one Processor (real or virtual).
* To have another bell to list in the brochures in the fight against AMD (¡Nehner nehner! ¡We have SMT! ¡and you do-on‘t!).

So, if SMT is a good idea, used in many other processors aside from Intel’s, and if there were good reasons to launch it ¿Why it became a joke?

Let’s explore what can fail in an HTT implementation.

There are factors which are not under Intel’s control, like applications not being designed to profit from HTT, or the OS scheduler may do a very dumb work assigning threads to the real or virtual processors.

There are others that are, more or less, under Intel’s control:
A.) The memory bandwidth may not be enough, “starving“ the microprocessor.
B.) There can be “Cache Trashing”, or cache insufficiency.
C.) There may not be enough Execution Units in your processor to handle both threads, leading to contention.

Solving ‘A’ is easy. The brute force approach will be to increase the FSB frequency. The elegant approach would be to design a better access method to memory and Inter Processor Communication, like what AMD did integrating the memory controller and doing CHT, or what Intel plans to do in Nehalem with CSI and an integrated Memory controller as well.

Solving ‘B’ again is easy. The brute force approach is to have a bigger cache. The elegant solution is to increase the “way-set associative-ness ” of your cache (going from 4 way set associative to 8 way, or 16 way)

Solving ‘C’, on the other hand, requires a brand new processor.

Now look at the differences between a P4 and a Nehalem.

Where the P4 had a FSB with around 533Mhz at the time of HTT introduction, and no integrated memory controller, Nehalem will have CSI and an IMC, and even if they had still a FSB, the FSB is now in the 1600Mhz territory, try to imagine the FSM at Nehalem‘s debut.

Where the P4 had a mere 512KB cache 8 way set associative, Penryn will have around 6MB (shared between two processors). And since the “set associativeness” for the current Core architecture is 16 way, one can only wonder what the cahce size and set-associativeness for Nehalem will be.

Where the P4 had four execution ports, the current Core architecture has 6, and one has to wonder how many of those will Nehalem have.

Couple that with the Dynamic acceleration technology and try to imagine one of your cores lying dormant while the real core, now accelerated serves your single threaded (i.e. gaming) needs, while the virtual core serves your OS and ancillary needs. If on top of that the needs are different at the MicroInstruction level (the game is doing heavy SIMD, while the OS is doing mostly integer) so much the better.

Finally Linux has adapted to HTT and Multicore, MacOS as well (remember, the PowerPC G5 had SMT), and so will be Windows by the time Nehalem debuts.

The analysts and comparers better begin to figure out how much of a speedup will the reintroduction of HTT bring, and factor it in the comparisons.