Why AMD Wins At $200 But Loses At $300 & $70

So, this is kinda interesting. AMD just introduced the Phenom II X4 955, and at its price point, it’s very competitive. The chip retails for $245 and, as it turns out, is faster than any Core 2 Quad that’s similar in price. Even AMD’s Phenom II X3 720 has the performance-per-dollar advantage at its price point. Where AMD can’t compete is at Nehalem’s price points, anything priced at $284 or higher. AMD’s dominance doesn’t extend all the way to the bottom of the price ladder, either. In addition to the Phenom II X4 955, AMD just released the Athlon X2 7850, priced at $69. A very affordable CPU, yes, but it doesn’t compare well with its closest competitor, Intel’s Pentium E5300, in terms of price/performance. Why is it that AMD is competitive in one price band but not another? Or, looked at from the opposite perspective, how can Intel dominate performance at one end but not at another? As you can guess, it boils down to having a multitude of architectures in the market at the same time.

Intel’s high-end processors are truly next-gen where performance is concerned. The Core i7 starts at $284 and goes all the way up to $999, and AMD simply can’t outperform those chips. In some situations it gets close, but overall, Core i7 offers a 0 to 40% performance advantage over the best of the rest. Unfortunately, the Core i7’s underlying Nehalem architecture won’t make its way into mainstream parts until the last quarter of this year. It’s unclear what Intel will call the mainstream version, but most are speculating that it’ll carry the Core i5 name. The i5 should be able to compete quite well with AMD’s Phenom II, but given that it won’t be out until sometime around October, that leaves Intel’s Core 2-based CPUs to compete with Phenom II. Clockfor-clock, Intel has the advantage, however, AMD is very aggressive on its pricing, and Intel fully intends to keep turning a profit even in poor economic times. The end result is what happened with the Phenom II X4 955; AMD’s 3.2GHz offering competes with Intel’s 2.83GHz Core 2 Quad Q9550. It keeps the marketplace competitive for the consumer, but AMD turned in a hefty loss on its earnings last quarter, so it’s not an approach the company can keep up for long. Move down in price again, and this time AMD’s architecture is the one that changes. Phenom II CPUs are built using AMD’s 45nm process on a die that’s nearly as large as Nehalem’s; there’s simply no way they could be sold for under $100 at this point. Instead, AMD is rebadging last year’s Phenom processors as Athlon X2s.

These things are 65nm quad-core chips with two cores disabled. The dies are too big to be sold for under $100, but after Phenom II, no one really wants an original, so AMD has no other option than to rebrand them as dual-core Athlon processors. Intel doesn’t switch architectures as you drop down to the $70 price point. The Pentium processor is a Core 2 derivative, albeit with less cache. At around $70, you’ve got the Athlon X2 7850 and Intel’s Pentium E5300. In pretty much all application benchmarks, Intel takes the win there. The notable exception is gaming performance, where AMD is the winner. Intel has the lower power consumption, as you’re getting a small 45nm die instead of a large used-tobe-a-quad-core 65nm die. I’d say that Intel is the victor at $70, but that all depends on whether you’re building a gaming machine. Over the next six to 12 months, we’ll see both manufacturers try to transition all of their CPUs to the same architecture, which may make things more clear-cut. Until then, that’s why the world performs the way it does.

Source of Information : CPU Magazine 07 2009

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