Recently, I attended Intel's manufacturing conference in Oregon. There, an Intel vice president, Stephen Smith, talked about Intel's roadmap for next year. I came away convinced that, unless Intel stumbles on execution, it will finally catch up to smaller rival AMD in chip performance.
Sure, investors have long hoped that Intel would catch up to AMD – and have been bitterly disappointed. Over the past several years, the chipmaker canceled several products. Its server and desktop processors have fallen behind AMD’s in key performance metrics. As the much smaller AMD began churning out higher-performing chips, Intel’s share of PC and server processor market sunk from 82.1% to 80.8% in the past year, according to semiconductor consultancy Mercury Research.
But, finally, Intel might be close to taking AMD head on. In 2006, Intel will release several key processors that, Smith claims, will, by the second half of 2006, place Intel's products ahead or on par with AMD’s chips. “[With these chips out], Intel is back in the ballgame,” says Jim McGregor, an analyst with consultancy In-Stat.
Intel’s rise won’t be instantaneous. “Intel has stumbled, and it will take it a few years to gain its premium reputation it once had,” says Peter Hofstra, an analyst at AIC funds. Industry insiders believe that AMD’s momentum might continue through the first half of 2006. In fact, AMD hopes to nearly double its server chips market share and grow its desktop processors share in 2006, says Marty Seyer, senior vice president of commercial business and performance computing at AMD. “We are gaining lots of traction,” he says.
But AMD could start feeling the heat from its larger rival come mid- to late-2006 as Intel rolls out chips that will be at least as good as AMD’s in performance. Let’s first look at server processors, where, today, AMD’s “Opteron would smoke [Intel’s latest server chips],” according to McGregor. When Intel introduces its chips code-named Sossaman and Woodcrest, in the first half and the second half of 2006, respectively, that “will get Intel back into the game, says McGregor.
To beef up its desktop chips, where Intel has fallen behind in performance and “has spent two years without innovation,” according to McGregor, the company will right the ship with Conroe, due out in the second half of 2006. The new chip should be as good as AMD's, according to McGregor.
What’s more, Intel’s much-anticipated Yonah chip on a so-called Napa platform (it’s due out in the first quarter), will be better than AMD's mobile offerings due out next year, believes McGregor. Today, notebook processors are the only area in which Intel leads AMD in performance.
Of course, the proof is in the pudding. AMD won't stand still, waiting for Intel to catch up. And Intel will need to keep to its products roadmap and to execute well to make 2006 the year when it finally responds to AMD's challenge.