AMD at Intel's Heels, Where Are We Heading?

By: Sion Fletcher
Submitted: 2007-01-17 15:47:56
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Intel Corporation was founded in 1968 as Integrated Electronics Corporation and is based in Santa Clara, California, USA. In 1991 Intel achieved the number one semiconductor market share ranking, and have clung firmly to their position ever since. Semiconductor technology progresses at a relentless rate, accelerated by a throw-away society and a technologically inclined generation. In a market where innovation and invention play such vital roles, it is a remarkable achievement for Intel to have kept one step ahead, retaining the crown amongst its competitors.

But who is there to compete against the CPU giant? Last year, Intel boasted impressive profit margins of 22.3%, leaving plenty of slack to cut prices in the face of competition. With the recent integration of Intel technologies by Apple, who chose to adopt Pentium CPU's for their workstations, it seems Intel's foundations are set ever more firmly in the uneasy ground of the semiconductor market.

AMD, Advanced Micro Devices, is an American manufacturer of integrated circuits based in Sunnyvale, California. It is the second largest supplier of x86-compatible, or desktop workstation, mobile and small scale server processors, following Intel. AMD is 15th among the worldwide top-twenty semiconductor sales leaders, generating revenues of $3.9 billion in 2005.

AMD once operated as a licensed second source manufacturer Intel processors, but in the face of growing popularity of the PC clone market, in 1986 Intel decided to free itself of ties to it's perceived competitors to start producing CPU's on its own terms. This action led to a prolonged and fierce legal dispute where AMD claimed Intel had violated their contract. The Supreme Court of California agreed, and forced Intel to pay over $1 billion in compensation.

In 1991 AMD released the Am386 processor, and followed with the Am486 in 1993. Both were competitively priced, undercutting Intel's equivalent processors. AMD quickly established a foothold in the semiconductor market, specifically in the desktop and workstation level, selling a million units of the former in less than a year.

More than a decade on and AMD continue to increase its hold of the semiconductor market share, pursuing its competitors with aggressive pricing and partnerships. Today, 24th July 2006, AMD announced the acquisition of ATI, a major supplier of desktop graphics cards, a transaction valued at approximately US$5.4 billion. As our processors play much more centric roles in our lives, it is not difficult to imagine a day where a personal computer sits along side, or even integrated into every television set. With such innovations as Sky+ opening up consumers to the idea of media centric computing in their living rooms, and subsequently their cars and their mobile phones, its clear why AMD sees potential in developing processors with integrated graphical functions and routines.

The mainstream semiconductor market is exciting to experience at either end, but as consumers we have only to gain from increasing the competition and demand, and the de-monopolization of the semiconductor market. New products from either side of such a competition increases innovation, and decreases the prices, which can only be good news!

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