To judge by the shift in the headlines, the processor war is nearly over. Who's in? Advanced Micro Devices (NYSE:AMD). Out? Intel (NASDAQ:INTC).
More proof of the shift in mindshare came this week when the headlines lauded a new advance in strained silicon techniques described by AMD and research partners IBM (NYSE:IBM) and Sony (NYSE:SNE). Purists might argue that this was neither new -- AMD's reportedly been producing chips under the process for a while -- nor an advance, since it's similar to a technique that Intel has also been using.
To give the announcement its due, it does sound like a cheaper way to achieve the results heretofore achieved through more expensive processes and exotic materials. And if it provides a near-12% performance boost promised at the high end, it should be a cheap way to get better clock speeds. But how much will this really matter? In higher-end chips, where such processes are currently targeted, who's going to notice the reported 2% cost increase inherent in Intel's differing technique? To judge by the reasons for recent 64-bit migration toward AMD, speed is much less an issue than features and backward compatibility.
But enough of the speculative geekery. More interesting to me is the way AMD's been able to capitalize on recent, small increases in market share and become the darling of the press corps. Don't get me wrong, I like AMD's products and wish I'd invested back when the writing was on the 64-bit wall, and I don't have much affection for Intel's continual efforts to snooker everyday investors by pretending that options grants aren't an expense.
But I'm also one of those people who believes in betting against the common wisdom. My colleague Tim Beyers has advocated shorting Intel, but though I agree with his assessment of the stock's trajectory, I think I'll just keep it on my sludge list. If things continue to go ill for Intel, in the pressroom and in the inventory room, I've no doubt there will be a point at which the firm really will be a value.
For related Foolishness:
- Guess who's at the head of the coalition of the greedy?
- Is Intel too optimistic?
- AMD was lean and hungry.
- Take a good look at Intel's Mongolian contortionist act.
- See Intel swing and miss.
Seth Jayson builds his computers with AMD chips, but he has to admit that the no-name Intel laptop he bought runs just fine too. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
