AMD Will Probably Continue to Lose PC Market Share During 2015

At Advanced Micro Devices' (NYSE: AMD  ) recent Core Innovation Update, the company talked a rather big game about how it was going back to the drawing board, crafting two new processor cores -- one that implements the X86 instruction set architecture and another that implements the ARM Holdings (NASDAQ: ARMH  ) architecture. While this does represent a glimmer of hope for the company (and the competitiveness of the series of products built on this IP may well reverse AMD's fortunes), investors in AMD will probably continue to deal with continued PC share loss throughout 2015.

In 2015, Intel will bring Braswell, Broadwell, and Skylake to the table
Beginning in Q4 2014, Intel (NASDAQ: INTC  ) -- the competitor to whom AMD has been losing PC share for years -- will roll out Broadwell (most likely the Ultrabook and fanless system SKUs), which should further cement Intel's position in the low-power, high-performance space. Not only does Intel benefit from a transition to 14-nanometer (which brings performance, power, and economic benefit), but it will also bring with it a significantly revamped graphics engine, which could serve to nullify AMD's last remaining selling point in the mid- to high end.

In addition, Intel plans to roll out a platform known as Braswell, likely during the first half of 2015. This is a low-cost 14-nanometer platform based on the Airmont CPU core and a low-power variant of the new graphics engine found in Broadwell. Not only will Intel have a pretty significant die size advantage thanks to the 14-nanometer process, but -- as a result of its mobile push -- it should have a pretty significant performance and potentially platform bill-of-materials advantage.

Source: Intel. 

By the second half of 2015, Intel will be ramping its next-generation "tock" known as Skylake, likely for Q4 2015 system availability (if the current cadence is followed). This should bring both a brand new CPU core as well as an updated graphics engine. According to VR-Zone, Intel will also offer variants with fairly aggressive graphics performance even for thin and light Ultrabooks.

What does AMD have in 2015?
AMD, in contrast, will be moving its most recently announced Puma CPU core to the 20-nanometer manufacturing process. Interestingly enough, the Mullins/Beema chips based on the Puma core have yet to show up in commercial systems and in fact were just recently "previewed" by a number of technology sites. Parts have yet to be tested (for either power or performance) by independent third parties outside of controlled AMD testing.

This implies, then, that the 20-nanometer shrink of these parts (along with the ARM Cortex A57-based version of this product) should be out within a year of the Beema and Mullins launches, putting them in systems perhaps in June or July 2015. It's difficult to see these products (built on Taiwan Semiconductor's 20nm planar process) competitive on a performance, watt, and dollar basis against Intel's offerings at the time in the mass-market PC space. AMD will probably continue to lose share in PCs throughout 2015.

But 2016 looks better
By 2016, AMD will have an entirely new CPU core and new system-on-a-chip products. These should also be built on the Global Foundries/Samsung 14-nanometer process, which, while not as dense as Intel's 14-nanometer process, should bring considerable transistor-level performance improvements. Now, we don't know when during 2016 these products will roll out. If it's mid-2016, then there is a window of a couple of months that AMD's 14-nanometer parts will compete with Intel's 14-nanometer parts. If it's late 2016, then AMD faces Intel's 10-nanometer parts, putting it right back where it started -- at a full process node disadvantage.

That said, AMD's problems today go far beyond the process technology, but are instead in poor architectural choices, so if AMD can really do something good on the architectural side, it stands a shot of improving its competitive position, even if it doesn't end up setting the world on fire. The big offset to this is that at worst, AMD will be competing with Intel's second-generation 14-nanometer architectures (both on Atom and Core).

Foolish bottom line
AMD's not in a great spot, but if it can deliver significant architectural enhancements and, more importantly, continue to build out its non-PC businesses, then there is probably a good future for the company. There's less to be bullish about on the traditional PC processor space, given Intel's enormous resources and manufacturing lead, but AMD doesn't need to outgun Intel in PCs to ultimately build a viable business. It simply needs to choose its battles very carefully, and it needs to offer some differentiation, some edge that nobody else has.

Right now, AMD is proving itself quite well in the semi-custom chip design business. If AMD can broaden its customer range and really show that it can execute there, then this could be AMD's future, and it's not a bad one if the company plays its cards right.

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  • Report this Comment On May 13, 2014, at 6:19 PM, H2323 wrote:

    What can you say, this article is a joke, writer is a joke. Disregard Ashref, he's just a fan if Intel, not objective investment thinking. Taking investment advice from Ashref would mean stagnation at best, a loss more likely though. If you need evidence go to his seeking alpha account, look at his advice on various stocks and clear disregard of facts then compare those stocks to gains and losses in the last 12 months.

  • Report this Comment On May 13, 2014, at 8:33 PM, Shaduck007 wrote:

    You would think that the Chief Executive Read would maximize his Cn connections and try to sell his chips to those Brands!

  • Report this Comment On May 13, 2014, at 11:20 PM, raghu78 wrote:

    ashraf

    you are back to your usual self pumping up Intel. lets see how 2014 pans out for Intel and AMD in the PC space before jumping to 2015.

    If anything you have now stopped talking about how Baytrail is superior as you have been proved wrong by AMD Beema/Mullins and Athlon. You will see official reviews by Computex timeframe when OEM products are announced. AMD is executing steadily and might have surprises for you. There is a very high probability that AMD makes the transition to HBM across GPUs and APUs in 2015.

    http://www.microarch.org/micro46/files/keynote1.pdf

    So the GPU performance gap if anything could also increase. As for CPU performance lets wait and see what AMD has in store on next gen 20nm Puma+ SOCs and Excavator based Carrizo APUs.

    Anyway I am going to have fun seeing the tone of your articles about AMD change over the next 2 years. I also expect to see your bullishness on Intel go down further.

  • Report this Comment On May 14, 2014, at 12:56 AM, TMFAeassa wrote:

    raghu78

    We still do not have any independent power/performance benchmarks for Beema/Mullins, nor do we have any announced tablet design wins for the latter.

    Perhaps you should wait for the design wins to pan out and the independent third parties to verify AMD's performance/power claims before declaring victory. After all, many were convinced that Temash was the greatest thing since sliced bread, yet I would challenge you to find a single worthy tablet design with this product.

    As always, time will tell.

  • Report this Comment On May 14, 2014, at 1:04 AM, TMFAeassa wrote:

    I should also add that I would be very pleasantly surprised to see AMD win some designs at some of the major OEMs like HP, Lenovo, etc.

    Hondo and Temash were a big disappointment unfortunately, but hopefully Mullins is the real deal. The previews were good, but that was in a controlled environment with a fairly large 11.6" design. Remember that Bay Trail fits into 7" tablets.

    Again, time will tell, and I look forward to seeing what Intel and AMD have in store for us at Computex.

  • Report this Comment On May 14, 2014, at 2:08 AM, raghu78 wrote:

    Ashraf

    There have already been news articles on Lenovo, Toshiba

    http://news.lenovo.com/article_display.cfm?article_id=1787

    http://news.lenovo.com/article_display.cfm?article_id=1788

    http://www.toshiba.com/us/press-release/101045

    and leaks on Dell

    http://downloads.dell.com/Manuals/all-products/esuprt_laptop...

    We will hear more about design wins at APU 14 in Beijing tomorrow and at Computex.

    http://news.mydrivers.com/1/301/301522.htm

    http://topic.pcpop.com/newtopics/AMD1405/

    I would like to hear if AMD has any design wins for Mullins after the previews which showed a lot of potential. I look forward to power consumption measurements by independent third party reviewers.

  • Report this Comment On May 14, 2014, at 4:38 AM, ta152h wrote:

    This is really overly simplistic, and not very accurate.

    Here's what we know. Jaguar and Puma have essentially the same CPU and GPU, so we know the performance. We know it completely destroys Bay Trail in both CPU and GPU. A 2.05 GHz Jaguar laid waste to the Celeron J1900, despite being clocked much lower.

    We don't know the power use, but they can turbo to 2.4 at 15 watts. AMD can't really lie about that, so it's much more power efficient at the same clock speed, probably 40%+, but minimally 25% plus on any clock speed. Still, it's always a good idea to wait to see exactly where it falls.

    Sure, Cherry Trail, based on essentially the same failed design as Bay Trail, will not perform against Puma. It can't. It's been too badly designed. The CPU will be essentially the same, but the GPU should be improved. Both are terrible designs, worthy of being scrapped. Add to that, Cherry Trail will be designed mainly for phones. On the plus side, Intel will continue to fund companies to use these poor designs (thus proving they truly are), and the lithography advantage is huge.

    So, AMD should continue to struggle in tablets for those last two reasons, but if you want a really good one, and can accept it's going to be more than a couple of watts, AMD will be a higher quality part. But, that's really not going to be a big market, but it's more than they have now.

    The problem for Intel is, and which you completely ignored, is the desktop and laptops. Puma/Jaguar is a much better desktop chip, so long as it's running at 2 GHz or more. Bay Trail can't deliver the performance to be satisfying on the desktop. It tries, but being a failed design, it fails. AMD is finally pushing these chips, and they're quite cheap, and so are the motherboards. Too cheap for Intel to compete with the Haswell, and they perform too well (again 2 GHz+ parts) for Bay Trail.

    With modern technology, good enough performance, very low cost, and a well supported GPU architecture, this is an attractive product that Intel can't effectively compete with.

    Haswell will dominate Kaveri, and probably make more inroads there. Intel will continue to own more market share in tablets, although I think it's reasonable to see AMD increase their share there(mainly because it's so low, where else can it go?). But, Puma can be successful in laptops, and Jaguar will almost certainly gain some traction in desktops.

    I see Intel losing some share overall, mainly in the low-end desktop(which they won't lose sleep over), and probably a bit in laptops and Puma is pretty good there. I can't see Kaveri doing much but getting dominated, and wouldn't be surprised to see Intel gain more share in the mid to high-end.

    But, don't underestimate the cats. Intel doesn't have competitive parts in that segment, and they aren't going to compromise their designs to win it, as they are targeting more lucrative markets.

  • Report this Comment On May 14, 2014, at 6:52 PM, SSchlesinger wrote:

    I read the title of the article and thought "oh gosh, I can't wait to read the comments." Just what I expected, people angry that you have anything less than glowing to say about AMD. That and 10,000 links to stories that support their notion that AMD is going somwhere.

    The AMD were quiet, dead quiet for a long time, then Bulldozer was about to come out. There was a lot of Bravado "AMD is about to Bulldoze Intel." Then failure, followed by silence. Then AMD problems at the GF FAB followed by more silence.

    Ashraf isn't pointing out doom and gloom for AMD. AMD seem to have more gong for it today than it has in a long time. But it needs to get on base. All the talk of large grabs of Intel market share doesn't look very realistic. Intel will fight tooth and nail for each server order. There will be no gimmies with AMD.

    If you think Ashraf is an Intel shill then you really don't know his writing well enough. He calls it like he sees it and sometimes its down and dirty negative on Intel as well.

    Tough, bur fair.

  • Report this Comment On May 14, 2014, at 7:29 PM, mtechac wrote:

    Only that Ashraf can't do math. Intel is bleeding billions in trying to design new chips to compete with ARM, Intel is bleeding billions in trying to stay ahead with chip foundries, Intel is paying indirectly to companies so that they will use their products, Intel doesn't have a high end GPU and GPU IP which means they will never catch AMD in the high end GPU performance race (failed Larrabbee project), Intel doesn't have the low-profit product business model to survive by selling low cost chips products, Intel is losing the Apple business since Apple has their new 64-bit ARM designs, Intel desings of x86 chips cost several times more money and time than anybody using ARM, Intel is beginning to lose their last strong hole which is the 64-bit server business, 64-bit workstation/laptop business, etc.

    From the latter, you have to be stupid to think that Intel is ahead of AMD, which has already reorganize, is making money on their chips, is recovering its 64-bit x86 server business, it rules gaming, it has Mantle, it has the only true hybrid HSA/hUMA chip in the world, its about to release ARM chips of their own design, its about to release higher end chips, and it is improving the performance of its new architecture in significant key areas, etc.

  • Report this Comment On May 14, 2014, at 7:50 PM, rav55 wrote:

    @Ashraf

    You are likely incorrect. Kaveri is becoming very well accepted in China and the far east. So much so that PIB sales has been delayed to continue feeding that oem channel.

    So that means market share in PC's will likely increase due to this interest from the Chinese market.

    The Chinese view Microsoft and Intel with some suspicion since the NSA thanks to Snowden is rumored to have back doors in Windows and Intel does have vPro tecnology chip which makes the pc visible to a 3g network to allow unauthorised access and monitoring of the CPU.

    Whether or not Intel or anyone else is using vPro chip technology is irrelevant. That threat remains and it is huge. Talk about a good reason NOT to purchase an Intel PC!

    Since AMD fab processes are not in-house, that would be seen as favorable to the Chinese market.

    And I quote....

    "We wonder if anyone expected this, but we suppose Intel had to drop a bomb at some point. And what better way to secure your spot on the enterprise 2-in-1 laptop, tablet and mobile workstation market, than by giving all of those PCs 3G support?

    Hilariously enough, Intel has created one of the most sought after technologies without letting anyone know about it. Basically, all Intel vPro CPUs (which include new mobile Core i5 and Core i7 chips) have an undocumented 3G chip inside. That chip is visible to the 3G network, even when the PC is not powered on.

    Freelancer Jim Stone has just discovered the secret (or so he says), and according to him, the 3G is part of a second physical processor embedded within the main one. Said second CPU has its own embedded operating system and can be woken up at any time because the “phantom” power of the system is always there to draw upon.

    In other words, the secret 3G chip can act as a backdoor, complete with wake-on-LAN and wake-on-mobile. Which is to say, the computer can be turned on remotely through this undocumented 3G radio."

    http://news.softpedia.com/news/Secret-3G-Radio-in-Every-Inte...

    And from 2010:

    "Intel's 'Sandy Bridge' Chip to Include vPro Business Features

    From a security standpoint, the biggest addition Sandy Bridge will deliver will be the ability to remotely kill and restore a lost or stolen PC via 3G, Marek said. Previously, that capability, which delivers a "poison pill" that can remotely wipe the PC's hard drive, was only available via Ethernet or Wi-Fi. Now, if that laptop has a 3G connection, the PC can be protected, Marek said."

    http://www.pcmag.com/article2/0,2817,2369110,00.asp

    Whether you or any other Intel fan boy believes this is also irrelevant.

    The question is do the Chinese believe it?

    Since ALL if Intel fab, testing and packaging is IN-HOUSE that is unknown. Since ALL AMD fab, test and packaging is not, it is likely that AMD has no back door exploits.

    This makes AMD a more secure option for foreign interests.

  • Report this Comment On May 14, 2014, at 9:06 PM, rav55 wrote:

    Should any one doubt how vPro technology can allow a back door exploit and unauthorised access:

    http://www.intel.com/content/www/us/en/enterprise-security/w...

    http://www.popularresistance.org/new-intel-based-pcs-permane...

    This could explain how the stuxnet worm was so successful.

    http://gizmodo.com/the-stuxnet-worm-had-an-evil-secret-twin-...

  • Report this Comment On May 14, 2014, at 9:09 PM, rav55 wrote:
  • Report this Comment On May 14, 2014, at 10:39 PM, bugsy1339 wrote:

    "AMD Will Probably Continue to Lose PC Market Share During 2015"

    maybe we should look at AMD gaining share in actual sales of product - easy enough to look at the revenue line - with your articles they are constantly losing share but actual revenues are going up so maybe as an analyst your not looking at the entire picture.

    when you talk about PC share i think being specific will help as well - AMD introduced mantle API and it appears it makes intel CPU's shine as well as AMD cpu's so when you talk about PC share does it count that Intel might decide to use AMD GPU's in their machines because of this performance boost? IE GPU's are in PC's too

  • Report this Comment On May 15, 2014, at 12:11 PM, alibaba0115 wrote:

    Mr Ashraf,

    Very soon you will lose all your credibility,.......shame, for someone seeking a career.

    Good luck

  • Report this Comment On May 15, 2014, at 4:47 PM, Beerfloat wrote:

    Congrats Schlesinger on being the one voice of reason in a comments section completely dominated by Pavlov responses. And to Ashraf for a sober and fair assessment of market reality.

  • Report this Comment On May 15, 2014, at 8:57 PM, rav55 wrote:

    @Beerfloat

    You brown nose is showing.

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