Bad luck has AMD cowering

Just when AMD had its swagger on, it turned common bad luck into a full-fledged stumble

Of course, timing is everything. That analyst wouldn’t have won the race to be the last and loudest voice of the year if he hadn’t encouraged buyers and (wink, wink) investors to join him on his trip down short-term memory lane.

AMD has had the kind of bad luck that just happens in all sorts of endeavors, and is common to all players in the semiconductor industry. AMD will miss a couple of narrowly defined targets for broad commercial availability of server and desktop CPUs. AMD also identified a flaw, an erratum in industry-speak, affecting a CPU unit known as the translation look-aside buffer (TLB). AMD has issued a microcode patch to OEMs, just as Intel did earlier this year when it filed an erratum on the TLB in Core 2 and Xeon CPUs. End-users won’t feel it, it won’t cost AMD any OEM wins, and AMD will have a strong position in Q1 ’08, where Intel has all eyes focused.

Intel is no stranger to getting the fuzzy end of it from analysts. Intel’s infamous F00F bug, so named for a gibberish opcode sequence that caused the CPU to halt until a hard reset, persisted through multiple generations of Pentium CPUs. It affected no one, but along with a benign flaw related to floating point divides, it put Intel on the defensive and slowed its entry into a commercial market then dominated by RISC, Unix, and other proprietary, purpose-specific platforms. Intel was derided as a toymaker, a partner with Microsoft in the making of the “peecee,” which would never be taken seriously — until it was, in which case the mighty market shapers knew it all along. A player is either the shining light or languishing in the shadows.

I’m referring only to the agenda-setting that lands analysts’ thumb on the scale that puts the stock market at odds with what’s happening in the real market. Penryn is quite advanced stuff, with a process shrink and a Hafnium dielectric delivering lower power consumption, but it does not wipe out Phenom, which takes its power savings from a process shrink and active, automatic power management that far exceeds the capabilities of Intel’s microarchitecture. AMD extended enormous power benefits to its new chip sets, which have had an industry-first process shrink to 55 nanometers, as well as to ATI’s new discrete GPUs (graphics processing units), which spit nails when they need to and nap when they can. And on and on — just re-read my last two Ahead of the Curve posts. At the very least, Phenom and Penryn will come out even, and in total system power consumption, AMD’s more efficient chip sets will put it in the lead. Penryn, and the analyst noisemaking about the death blows of AMD’s delayed deliveries, does not make Phenom, Spider, or Barcelona go away.

But you wouldn’t know this by watching AMD’s marketing. AMD empowers its critics by overreacting to remarks that would be shrugged off by the market if it weren’t so afraid of spooking investors. Apple has made a very good living by suffering in silence the various barrages of Nerf missiles fired at it by naysaying analysts grasping for influence. AMD is in danger of retreating from the strongest position it’s had since the company was formed.

Spider is a troubling case in point. I’ve lauded Spider not only as brilliant technology, the market’s first standardized, affordable, high-performance desktop platform that includes industry-leading graphics, but as stellar marketing that could only be made in Canada. AMD handed ATI the reins for marketing its Phenom CPU, 7-series chip sets, and top-shelf ATI Radeon PCI Express 2.0 cards as a whole platform, with the mascot being a chrome spider that really sticks in your head — smart, smart, smart, a trial balloon that met with enormous success. Or it would have if AMD had left it alone.

After Penryn hit and analysts subsequently took after AMD for short delivery delays, AMD pulled two legs from its Spider campaign by adding a banner to its Spider landing page for a “Black Edition” Athlon 64 dual-core CPU. Pull up the product page for the dual-core CPU and you’ll see a tarantula and some market come-ons (“Do you dare?”) that have none of ATI’s signature, lusty panache that works every time. AMD overreacted to a challenge by falling back to a position that leaves everybody wondering what AMD’s flagship is. Likewise, AMD is answering Barcelona critics by pointing out that dual-core Opterons are selling well. All true, but we really want to know what’s coming. Intel spent an entire year living in the future. AMD shouldn’t answer that by spinning its greatest hits.

I know that it’s all about investors, and AMD is looking for positives to offset an overlap of bad luck and a competitor’s high-profile product debut. Get mean, guys. Intel went to Hafnium and process shrink as shortcuts to saving power, and the only place it can go from here is to shrink process again. AMD retooled its microarchitecture with independently clocked cores and split power planes, and it built chip sets that double the bandwidth of I/O buses while vastly reducing whole-system (not just CPU) heat and power consumption. Phenom was architected with the die space, three-level cache, and bus/core/unit power management architecture that will carry it to eight cores with a matching power envelope. It’s a no-brainer. Bragging about the future that Phenom makes possible, making a fuss about the “tock” that’s built into Phenom, won’t kill sales for quad- and triple-core Phenom. Phenom has nothing to fear from Penryn, and Spider is Phenom’s best and most compelling showcase.

And AMD, please reverse your decision to dilute Spider. Bringing the best of AMD and ATI together creates anticipation that Penryn can’t overcome. Keep Spider fresh and nasty, and buyers won’t care about a short wait.