Articles are popping up all over the place regarding AMD’s new Phenom chip, and the fact that Intel won’t be bothered much due to its apparently lackluster performance. They’ve also been experiencing heavy losses for four straight quarters, not helped by the acquisition of ATI. With these things and more in mind, some people are actually predicting the ultimate and final demise of AMD. Given that Intel is cranking out a new platform every 2 years, some can hardly blame them for thinking that! But here is why I think they’ve got one heck of a fighting chance…and what Intel will have to do to make sure they don’t come back.

Intel Takes the Lead

We’ll start off with a period of time not long ago when AMD was cheering over its shiny new X2 line of CPUs. If you’ll recall, they challenged Intel to a “Dual-Core Showdown”, directly targeting Intel’s beaten-to-death NetBurst architecture being used by the Pentium D. Benchmarks and real-life evaluations showed that NetBurst was ready for the trash compactor, for those who hadn’t figured it out already. Shortly after X2 had proven itself, Core 2 by Intel entered the game and began thrashing AMD’s prized possession to the nth degree. Since that point, there has been no full recovery. Products have been released by AMD, but the story each time has been “too little, too late.”

Intel, on the other hand, is still riding the wave of Core 2, slimming down to 45nm process, and generally enjoying the fact that they dominate the market. The good news for them is that they can continue to pressure AMD with price drops simply because they can afford to do so. They have left their competition in a position where they must sell more expensive processors that don’t perform as well. Take a wild guess at where people are putting their money.

Can AMD Recover?

So with a seemingly grim situation for the underdog, where is the light at the end of the tunnel? A little luck, combined with some very solid planning, gives AMD an extra card to play. Take the following into consideration: They just got an outside investor’s $622M, Phenom/AM3 chips work with socket AM2 (making AM2 owners like me very happy to see a viable upgrade option), the HD 38xx series of video cards are looking to be incredibly successful given the circumstances, and their losses in the last year have been cut dramatically.

Now you probably think I am going crazy, especially with that last comment. We know by now that AMD is losing all kinds of money, mostly to do with falling market share and backlash from obtaining ATI. However, looking at the charts, we can see a very clear recovery happening. Loss is indeed bad, but recovery is like a better bad. It means they haven’t given up, and that they are taking back ground.

Using this information, and basing it on the past, it is fairly safe to assume that AMD/ATI will come back. But enough about them. What is going on in the Intel world?

Well, for starters, they just opened their new 45nm chip factory. Their chips are being used by Apple (granted that this isn’t a big market comparatively, but every penny counts). Here is a kicker: they have won the heart of the enthusiast, and brought very powerful computing to nearly everyone buying a PC. Unfortunately for AMD, the enthusiast goes with what works best. The Core 2 landslide has brought enthusiasts a very reliable and exceedingly fast platform that is comparable in some ways to the earlier FX series in its day. Top that off with a massive product lineup that leads to options at nearly every price point, and you have a recipe for success. And don’t think for a second that Intel will back down; Penryn and Yorkfield are here, with more coming.

Conclusion

So now where does this leave us? Well, Intel needs to just keep on keepin’ on. They are sitting on record gains and a very fast-paced development time line that seems to be working quite well.

However, if they hope to keep the lead, they need to stay on schedule; winding up with another NetBurst-like issue will put them exactly where they were a few years ago. They’ve got the money, the advertising, and for now the time to stretch their legs and try a few things. If they get lazy and don’t keep on top of what will be aging technology, the crown will get handed back over to AMD sooner than they’d like.

What can AMD do about this monolithic company? They need to regain the touch they seem to have lost around the release of X2. The company gloated in the face of the final Pentium chips, only to get kicked in the face by Intel’s Conroe, and sand in the eyes by the rest of the lineup. Now they have rubbed the sand out (for the most part) and are sprinting to catch up. What will give them an edge is if they can focus on what needs to get done, and it appears that they are taking that direction. The recently debuted Spider platform is a direct appeal to one of AMD’s cherished market, being the enthusiast. While not quite the 1-2 knockout that is could have been, it’s strength is in AMD’s ever present scalability. If they can repeat this pattern like they have with previous architectures and extend it into their newfound graphics department and chipsets, they will likely have a formula to compete with Intel’s ‘tick-tock’.