The AMD split: Can two companies fare better than one?
Naturally, ATIC will have an interest in the success of its 44% partner in the Foundry Company. But as we approach the 22 nm generation of processors, when we start thinking about octo-core as standard equipment, there will have to be new and fundamental improvements in the way individual cores are designed.
In-Stat's Jim McGregor feels those improvements will soon involve scenarios where processor cores become interchangeable within CPU designs themselves, to the point where different cores are designed for different purposes, and separate CPU packages bundle certain cores together for targeted tasks. The concept is called heterogeneous cores, and AMD has itself been touting it since at least 2002.
"We're not in a monolithic design environment any more. We're dealing not only with a lot of different, critical pieces of IP from the cores to the on-chip interconnects to the memory interfaces," McGregor told BetaNews. "And it's only going to get worse.
"I've said that by 2010, both Intel and AMD are going to have to go to heterogenous cores to be competitive. And they're both moving in that direction. However, as we look even farther out, not all of the IP on their chip is going to be theirs [Intel's or AMD's]. That's inevitable. And when you get to that environment, that becomes even more difficult."
The problem of intellectual property could be a critical sticking point, not only for AMD but for Intel as well. As Intel told BetaNews yesterday, it's concerned that the new business model for AMD may not be compatible with the terms of its current cross-licensing agreement -- which also lets Intel use technology that belongs to AMD. And if you think that doesn't happen, McGregor reminded us, we should remember AMD owns ATI and ATI has Crossfire -- its GPU multiplexing technology, which Intel chipsets must support to be viable.
A nightmare scenario could involve the creation of some sort of independent licensing pool, not unlike what media and CE companies deal with today with entities such as the MPEG Licensing Authority -- bodies that collect the IP for multiple rights holders, and sell them to licensed manufacturers in bundles.
"The challenge of designing these chips, especially when you're getting over a billion transistors, it becomes exponentially more difficult. As the integration level goes up...I don't think [the deal] has any near-term impacts, or at least not on what [AMD has] in the pipeline. But when I look five years out and farther -- that was my biggest concern even before they announced this -- I told them, 'You know, I really worry about this.' I think this is a short-term gain with potentially a long-term problem."
While some may think Intel could be sitting in the catbird's seat while AMD struggles to regain its footing, McGregor believes that in the era of heterogenous cores and IP cross-licensing, Intel may actually require AMD to be a healthy company, if Intel is to survive the coming economic downturn. Healthy...but certainly not too healthy.
"AMD had to do something financially," he said. "On Intel's side, it bodes well for them to have a healthy AMD, because obviously they don't want to trounce AMD into the ground. If they do, then they've really got problems. So something had to happen.
"[But] Is this the best scenario? I don't know. Yea, AMD needed funds, and in today's market this may have been the only way to get it, at least from a partner that's not going to try to screw up your management structure and everything else...But Intel's got to be sitting there and wondering, 'Okay, we may not really be happy about this situation because now we've got two companies, not to mention a foreign entity owning one of those companies. But on the other hand, AMD did have to do something, and this may help AMD now but it may hurt their competitive position as well as their bargaining position further on down the road, so that helps Intel. So I don't know, if I was Intel, that I'd be complaining too loudly."