Nanotech - The Circuits Blog

Updated at 3:45 p.m. PST with correction of Motorola, IBM executives' names.

Even the biggest chip companies churn out their share of flops. But the hype that surrounds these chips is more fascinating than the failures.

It's been almost a year since I posted A brief history of chip hype--and flops (part 1). Consider this Part 2.

Itanium
First, I have to revisit Intel's Itanium. Simply because it's still around and still missing production target dates.

Intel's Itanium has been relegated to obscurity if not practical oblivion

(Credit: Intel)

The hype: "This design philosophy will one day replace RISC and CISC. It is a gateway into the 64-bit future." This copy was, at one time, posted on Hewlett-Packard's Web site. And analysts were drinking the Kool-Aid too. "I expect Itanium to replace Xeon, but not until 2003," one analyst said back in 2001. (Xeon is Intel's successful, lucrative line of server processors that doesn't include Itanium.)

The reality: Yes, Itanium is still warm, still breathing in the rarefied very-high-end server market--where it does have a limited role. But its architecture will never live in a desktop or laptop or even 99 percent of the servers as once thought. And it certainly hasn't remade the computer industry. And it is still chronically late. This time it's Tukwila that's tardy. The quad-core version of Itanium is late because Intel had to make "some engineering enhancements to the Tukwila platform," according to an Intel statement earlier this month. I can only guess that one day Intel will finally let this failed research project go cold and die quietly.

PowerPC
IBM's original PowerPC platform never lived up to the hype. Even when Motorola and IBM processors populated Apple computers.

The hype: "The PowerPC G5 changes all the rules. This 64-bit race car is the heart of our new Power Mac G5, now the world's fastest desktop computer," said Apple CEO Steve Jobs back in 2003. Jobs, a master of hype (also referred to as a Svengali-like reality-distortion field), continued with this precious quote. "IBM offers the most advanced processor design...and this is just the beginning of a long and productive relationship." (Emphasis added.)

The reality: Apple dumped IBM, Motorola, and the PowerPC in 2005 and it was revealed later that the Mac operating system had been leading "a secret double life" for about five years. But the PowerPC platform had really failed long before 2005. Look no further than these comments from an IBM marketing manager in this 1997 Electronic News article: "Many business school case histories will be written about this failure," Jesse Parker, marketing manager at IBM Micro, said at that time. "No one of the three companies involved in PowerPC executed on their plans. IBM didn't. Motorola didn't. And Apple didn't," he said.

The original PowerPC project was conceived by John Sculley, president and CEO of Apple, and Jack Kuehler, vice chairman of IBM. Phil Hester, an IBM manager at the time, and David Mothersole, a Motorola executive, where also instrumental in starting the project, known initially as "Somerset." But as the PowerPC came to market, Mr. Sculley was pushed out of Apple (and) Mr. Kuehler retired. Their replacements did not have the same enthusiasm for the PowerPC alliance, dooming the project.

In short, the PowerPC failed to challenge Intel in the PC market in a big way. (Though it has been reincarnated as IBM's Cell processor that powers Sony's PlayStation and the architecture still powers IBM servers.)

And I have my own vignette to relate that illustrates one reason why Apple eventually dropped the PowerPC. When Apple first began to crow about the dual-processor Power Mac (circa 2003), a neighbor of mine at the time bought into the hype and purchased an Apple Power Mac tower with two IBM G4 processors (this preceded the dual-processor G5 tower that followed soon after). This thing was a furnace. It quite literally raised the temperature in the room it was in, had about five fans too many, and was deafening, to boot. That was the first time I fully understood the magnitude of Apple's fabrications about IBM's "superior" PowerPC designs. (IBM's less-than-impressive--at that time--chip manufacturing process that was used for PowerPC processors also contributed to the problem.)

AMD Puma
Lastly, turning to Advanced Micro Devices, I'll try to look beyond the botched Barcelona launch in September of 2007 (as I've already covered this in Part 1) and focus instead on AMD's mobile "Puma" platform. Though I can't leave Barcelona entirely out of the discussion because there are some disturbing parallels. (Note: AMD's upcoming Yukon and Congo platforms offer some hope for mobile redemption.)

The hype: Like Barcelona, AMD had too much to say about Puma too long before it was real. AMD started pumping Puma back in April 2007 when the company did one of its many (infamous) soft launches (a PR strategy that it has thankfully ditched). This prompted some editorializing from me as well as other publications. "It is questionable whether...Puma will meet the hype AMD is currently trying to generate though these early announcements," according to a rare editorial from DigiTimes in 2007.

Things got even more dicey at the financial analyst day in December 2007 when AMD said Puma would be delayed until the second quarter of 2008.

It's not so much that Puma (aka Turion X2 Ultra coupled with ATI graphics) is a failure of epic proportions like Itanium, it's that the CPU component (separate from the ATI GPU component) fell so far short of the long, ballyhooed build-up it got.

And it is beaten consistently by Intel in the mobile marketplace. Here's an October 2008 CNET review of laptops with AMD's Turion X2 Ultra. "Turning to AMD's 2.0GHz Turion X2 Dual-Core RM-70 CPU might be an option if you're looking to keep costs down and have only basic computing needs," the review said. "The Acer Aspire 5735-4624 costs only $499 and uses a 2.0GHz Intel Pentium Dual Core T3200; it completed our multitasking benchmark test in one-third the time the HP G60 did. The HP G60 wasn't the last-place performer in our mainstream midprice holiday retail laptop roundup. That dubious distinction goes to the Toshiba Satellite L355D-S7825, also an AMD-powered system."

And there are more unfavorable comparisons. This review at Hexus.net of a Toshiba Satellite 300D with AMD Turion X2 Ultra ZM-80 said the Turion X2 Ultra CPU was "found wanting when compared to Centrino 2." The one bright spot was the ATI Mobility Radeon HD 3650 graphics card--but this speaks more about solid ATI technology than AMD's shaky Turion processor.

AMD thriving in Intel Centrino 2 notebooks? At Hewlett-Packard, the world's largest PC maker, the answer is "yes."

HP 17-inch 6830s is offered with the AMD-ATI HD 3430 graphics chip.

(Credit: Hewlett-Packard)

Although consumer notebooks get most of the press, business notebooks get most of the sales. "The prime purchaser of notebooks still remains, as a segment, business," Intel CEO Paul Otellini said during the Intel earnings conference call earlier this week.

Among Hewlett-Packard's slew of upcoming business notebooks (HP Compaq 6730s, 6830s, 6530b, 6930b) with Centrino 2 processors, Advanced Micro Devices' ATI graphics chips figure prominently. And notebooks such as the HP Compaq 6830s and EliteBook 6930p are offered with comparatively high-end AMD-ATI mobile graphics.

"It reflects new design wins," said Dean McCarron, principal at Cave Creek, Ariz.-based Mercury Research.

"Those design wins were locked down last year," new AMD CEO Dirk Meyer said in the company's earnings conference call Thursday, referring to AMD graphics-chip design wins on the Centrino 2 platform. "So, now is when they will start to pay off. (We're) getting 60-plus percent design win share on (Centrino 2)."

The Centrino-2-based EliteBook, for example, packs an ATI Mobility Radeon HD 3450 with up to 256MB of memory. This kind of robust graphics configuration for a business notebook was almost unheard of a year ago when Intel's integrated graphics garnered most of the design wins.

Though Intel's new and improved GMA 4500HD Centrino 2 graphics is offered alongside AMD-ATI graphics in many new HP business notebooks, HP is also selling AMD-only business notebooks based on its Puma platform--AMD's answer to Centrino 2. The upcoming HP Compaq 6735s, for example, offers the AMD Turion X2 Ultra (2.2GHz) with integrated AMD graphics.

Overall, AMD-ATI graphics dominate HP's mainstream business notebook line-up. Out of 16 models listed on HP's "Balanced Mobility" notebook page, a whopping 10 systems are offered with AMD-ATI graphics. And five AMD-only systems appear in the line-up using AMD Turion and Athon X2 processors.

Here are the Intel and AMD processors used in new HP mainstream business notebook PCs:

Intel Core 2 Duo T9600 (2.8GHz, 6MB L2 cache, 1066MHz FSB)
Intel® Core 2 Duo T9400 (2.53GHz, 6MB L2 cache, 1066MHz FSB)
Intel® Core 2 Duo P8600 (2.4GHz, 3MB L2 cache, 1066MHz FSB)
Intel® Core 2 Duo P8400 (2.26GHz, 3MB L2 cache, 1066MHz FSB)

AMD Turion X2 Ultra Dual-Core ZM-82 (2.2GHz, 2MB L2 cache)
AMD Turion X2 Ultra Dual-Core ZM-80 (2.1GHz, 2MB L2 cache)
AMD Turion X2 Dual-Core RM-70 (2GHz, 1MB L2 cache)
AMD Athlon X2 Dual-Core QL-60 (1.9GHz, 1MB L2 cache)
AMD Sempron SI-40 (2GHz, 512KB L2 cache)

AMD's processor business has been in the dumps for well over a year. But a resumption of quad-core shipments and a reduction in its workforce, though painful, may signal a turnaround.

AMD quad-core Opteron finally on its way to computer makers

(Credit: AMD)

Before we get to the good news, let's first consider a draconian scenario for Advanced Micro Devices. As the chipmaker was announcing Monday that it would lay off 1,650 employees later this year, the stock was hovering just above $6, down from the mid-$20s a year ago and about $40 two years ago. If things do not improve, the company may split in two, according to Ashok Kumar, an analyst at CRT Capital Group.

Kumar sees one scenario in which AMD bifurcates into a manufacturing concern and a design company. If earnings don't trend up by the second half, this is a real possibility according to Kumar. "They don't have too many options with the debt overhang (from the ATI acquisition)," he said. The soft economy may not help matters either.

Kumar listed the well-known reasons for AMD's profit shortfalls: Lack of competitive offerings, blended ASPs (average selling prices) well below Intel's, and the delayed ramp of the high-end quad-core Opteron.

But these negatives--so the upbeat narrative on AMD goes--are the chipmaker's past, not its future. After a very long delay (about one year), AMD's quad-core Barcelona for servers is just about set to ship to the largest computer companies in the world: IBM, Hewlett-Packard, Sun Microsystems, and Dell, among others. "Barcelona ASPs are 300 (dollars) plus. That historically has been the profit pool of the company," Kumar said. Once AMD ramps Barcelona and the desktop quad-core Phenom, things should "dramatically improve," he said.

And AMD's mobile offerings are getting better too. "They were probably at their weakest point in 2007," said Dean McCarron, founder and principal of Mercury Research. "The next design cycle for notebooks is happening right now. You can safely say that they are more competitive than they were last year" vis-a-vis Nvidia, he said.

Along these lines, AMD is slated to bring out the "Puma" mobile platform this quarter. Puma is based on the RS780M chipset and AMD's dual-core Griffin processor--now called the Turion Ultra. The new Turion is all about power consumption (to reduce power, each core can run at different frequencies) while the RS780M, AMD claims, is up to five times faster than Intel's current X3100 integrated graphics silicon.

Partnerships may also be helping AMD in the mobile market. "They've been partnering with some of the most aggressive OEMs out there. That plays to their favor," said Jim McGregor, an analyst at In-Stat. "Companies like Acer and Toshiba have been extremely aggressive worldwide, especially in North America, at gaining market share," he said.

The desktop is looking better too, with the triple-core and quad-core Phenom processors just beginning to ship in volume.

All this optimism is cautious, of course. "The competitive environment that they're in now is a little bit different than the one that they were in before. Intel is much stronger," said McCarron. "We have Nehalem (the next-generation Intel microarchitecture) coming at the tail end of the year and the Penryn products are very competitive," he added.

AMD also said Monday that it expects to post first-quarter revenue of $1.5 billion, about 15 percent lower than the fourth quarter. This is well below seasonal declines. So upcoming earnings could be ugly in some respects. "Plus the pullback in consumer and business spending. Q2 tends to be a little bit low in terms of revenues," McGregor warned, referring to factors that affect both Intel and AMD. "They're facing a little bit of headwind in terms of economic and spending conditions."

And all of the positives cited above may happen slowly for AMD. "Things don't swing overnight. They take time," McGregor said.

AMD is announcing its future Puma mobile technology yet again. This time at CeBit.

On Tuesday, the news headlines for AMD's Puma mobile technology demonstration at CeBit used words like "launches" and "formally announces." But this is neither a launch nor a formal announcement.

To be fair to AMD, spokesman Scott Carroll said this Tuesday: "No, it hasn't been launched and won't be launched until Q2." And he added: "Today at CeBit we unveiled our first working demo of a Puma platform and demonstrated its graphics capabilities vs. our existing mobile platform and vs. Intel's."

The problem is that AMD has been announcing Puma since the "launch" in April 2007. That's almost a year ago. At that time, DigiTimes--a nuts-and-bolts hardware technology news publication that rarely editorializes--reprimanded AMD, saying: "It is questionable whether...Puma will meet the hype AMD is currently trying to generate though these early announcements." And AMD has been trying to sell Puma ever since.

Things got a little more real--and more dicey--at the financial analyst day in December when AMD said Puma would be delayed until the second quarter of 2008. But AMD hit its Puma promotional stride again at CES in January.

So, what's new at CeBit? AMD's Carroll said that Puma has garnered over 100 design wins from original equipment manufacturers around the world and expects to have systems available for launch in Q2 2008. The price of Puma-based systems will range from $699 to $2,500.

Almost all other information about Puma is not new. It has been repeated in many forums that Puma uses the RS780M chipset and is based on AMD's dual-core Griffin processor--now called the Turion Ultra--and integrates 1MB of L2 cache. To reduce power consumption, each core can run at different frequencies and can dynamically shift frequency levels while executing a thread. The RS780M integrates a Direct X 10 graphics controller, which AMD claims is up to five times faster than Intel's X3100 integrated graphics.

Puma-based products will also come with Wi-Fi and an optional graphics card. In other words, a complete solution similar to Intel's Centrino.

Some Turion Ultra notebooks will also have the ability to turn on the more powerful discrete graphics chip and then turn it off when the extra oomph isn't needed in order to save power, as explained by AMD at CES, among other forums.

AMD roadmap dating back to 2006

(Credit: AMD)

Advanced Micro Devices may have been demoted on Dell's Web site (though three AMD-based notebook models are still listed). But its chips aren't collector's items yet.

A quick inventory of Best Buy, the largest U.S. electronics retailer, is telling. A search on the reseller's Web site greets you with a page full of AMD-based notebooks. Ten to be exact. Some are fairly attractive too. Many are models in Dell's svelte Inspiron line. (Correction: not Dell's XPS line). Granted, Best Buy may not have the turnover of Dell's Web site but it's not Radio Shack either.

HP dv9715

(Credit: Best Buy, AMD)

Then there's Hewlett-Packard. If the perception is that AMD is fading at Dell, that's not the case (at least not yet) at the largest PC supplier in the world. "AMD represents a good value from a price/performance ratio," an HP spokesperson said.

In addition to the AMD-based notebooks available on HP's home-and-small-office site, a crush of systems is listed on Best Buy. If you're keeping score: AMD 9, Intel 4. Go to Staples online, and it's nothin' but AMD in HP.

And let's not forget Toshiba. In addition to listing seven AMD-based notebook on its Web site, almost half the Toshiba notebooks at Best Buy use AMD chips.

What about the brick-and-mortar Best Buy? At a Southern California Best Buy (just south of Orange County), there were 34 notebooks on display. Exactly half (17) of these used AMD chips (mostly dual-core Turion processors). And most of the AMD systems were placed at the front where people browse. But here's the catch. The salesman was pitching Intel. He volunteered that Intel's Core 2 beats AMD's dual core. "Intel runs cooler too," he said. And he had nothing positive to say about AMD. That's a problem.

Which brings us to another problem AMD may face. Last fall, Intel CEO Paul Otellini said in a conference call that his company has "walked" away from "a lot of low-end business" in mobile and desktop because it's not profitable. This is a real danger for AMD: getting relegated to the budget bin where profit margins are typically thin. (Many of the AMD systems are below $900.) But that story--whether AMD's profit margins are in fact razor thin or not--will be told in upcoming earnings statements.

The bigger problem may be Intel's Silverthorne and its low-cost x86 derivatives. These chips are designed specifically to compete at the very low-end--and make money there--unlike current Intel processors. Though nobody knows at this point whether Silverthorne will be competitive or not, its mantra is worth noting: low cost is good. "Because they are so small, literally thousands of them can be cut from 300mm wafers at 45nm. Thus, their economics are incredibly good," said Roger Kay, an analyst at Endpoint Technologies Associates.

And Otellini said more or less the same thing during Intel's fourth-quarter conference call. "We're embracing this trend with Silverthorne and will take the pricing down even lower...A tailored product for ultralow cost notebooks is a new thing for us," he said.