Intel reserved $ 3 billion in 2019 to competitively block AMD

Discussion in 'Frontpage news' started by Hilbert Hagedoorn, Oct 14, 2019.

  1. Cyberdyne

    Cyberdyne Ancient Guru

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    It doesn't become bad because there are only two cpu makers.
    If AMD were to put extra heat on Intel by hypothetically signing a contract with Alienware to only use AMD CPUs then I also wouldn't care. And I doubt you would.
    Also understand that it takes two to tango here, Intel wouldn't be forcing OEMs to take the deal. OEMs would accept it because it's a good deal. They can say no, and still build both kinds of computers.

    This kind of competition is fine, using your money to reinvest makes sense. Having more money than the competition makes that easier, of course. And this behavior could lead to a monopoly, which is illegal. But it's important to understand that's the vicious cycle of any company.

    Every company aspires to be the monopoly, every move they make ideally moves them closer to that. Which is perfectly legal. But the reward for actually meeting that goal is to be punished by the law.
    Intel believes (rumor mind you) that taking this action will make them competitive. Which is true, Ryzen is a threat they can't ignore. If that leads them to be a monopoly, then they will be punished, it's happened before.

    You can argue that it's immoral if you like. But that's a conversation I have no interest in.
     
    Last edited: Oct 14, 2019
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  2. genie

    genie New Member

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    Last time Intel did this, the cashback was contingent on OEMs buying no AMD products, which is illegal. LG didn't make you sign a contract to not buy a competing product in the future for example. Now remember at the time Intel started the practise AMD processors were faster, and cheaper than Intel, but that AMD was capacity constrained and unable to supply more than ~25% of the market. The position it put the OEMs in was 1) either buy the ~25% of their processor demand from AMD and forego the ~30% cashback that Intel offered on the remaining 75% of OEM processor demand, or 2) forego any AMD purchase and get 30% cashback on the 100% of processor demand that Intel could meet.

    The end result is that no matter how AMD priced their processors or how competitive they were, they were essentially locked out of the medium to large OEMs because the Intel cashback was conditional on them purchasing no AMD products, and OEMs still had to purchase the majority of their processor needs from Intel to meet their product demand needs. If Intel (like LG) had offered the cashback with no conditions like that, then AMD could have competed on price and captured some percentage of marketshare. Instead they were locked out of the OEM market, significantly impacting their ability to generate the marketshare growth and hence revenue they should have achieved with a higher performing cheaper (unit price) processor.

    All that is not to say Intel is doing the same thing again, but it is not unreasonable to worry.
     
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  3. waltc3

    waltc3 Maha Guru

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    They're probably planning on losing at least $3B to catch AMD, is the way I read it. Just retooling their extensive FABs for 7nm will cost billions. They've already ponied up a cool $1B to AMD when they settled their AMD anti-trust suit a few years ago. So, as terms of that settlement, they can't do what they did last time--float Dell for several quarters and pay out lots of money for OEMs to buy Intel instead of AMD--so they won't be doing that again, most likely. But they will definitely have to become the "value proposition" until further notice--they will do as the market dictates as opposed to what they dictate--quite a switch for Intel's management, I imagine.
     
  4. Astyanax

    Astyanax Ancient Guru

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    Cashback to end users - good
    cashback to mass purchase partners and oem vendors = anti competitive.
     
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  5. sykozis

    sykozis Ancient Guru

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    G-Sync came to desktops first, but Adaptive Sync was available in laptops before G-Sync was available.

    If there are multiple companies competing, and none are trying to lock another out of the market, it's fine. In the case of Intel and AMD, Intel holds a majority of market share and any "cash back" deal could easily be seen as anti-competitive because it would have the potential to prevent the sale of AMD processors to OEMs that AMD would have otherwise gotten. Basically, Intel is limited in what they can do to defend their market position against AMD because of how much market share they have. They can't legally do anything that could prevent AMD from competing.

    In the past, Intel offered financial incentives to OEMs that refused to use AMD processors, and punished companies (like Compaq who Intel forced into bankruptcy) that refused to cease the use of AMD processors.

    In the case of Intel and AMD, an exclusivity deal would be considered anti-competitive because of Intel's market position.
     
  6. Cyberdyne

    Cyberdyne Ancient Guru

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    There's a good reason why it's legal though. If it's ok sometimes and not ok other times, you need a concrete way to decide when that is.
    When is a company too big to get exclusive deals? Law doesn't like to deal with opinion. Taking action to remain at the top doesn't mean you're being anti-competive. If anything it's overly-competitive.

    The factors for monopolization is pretty simple, concrete. If Intel were so aggressive that AMD was at risk of closing shop. Easy.
    But AMD is doing great.
     
  7. Corey

    Corey New Member

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    Intel got find 1.4 Billion for anti competitive behavior (ACB) last time they did it. I doubt they will do it again. Also it is not wrong for Intel to lower their price by at least Australia's ACB laws unless they deliberately try strong arm AMD out of the market. For example, If Intel took a significant hit on their products deliberately to the point where AMD could not compete then that would be ACB. Like if Intel started selling the 9900k for $100, taking a huge loss in the hope it would sway people to buy that over the AMD equivalent. My uneducated guess is AMD would not survive that kind of drop.
    On the other hand if Intel dropped their price by a bit, which made AMD lower their price by a bit, and so on that would not be ACB.

    The second scenario means we have a price war which is great for consumers. First scenario means AMD loses out Intel, loses a competitor and then Intel hikes the prices again with little to no competition.
     
  8. Astyanax

    Astyanax Ancient Guru

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    Law is subjectively opinion.
     
  9. Cyberdyne

    Cyberdyne Ancient Guru

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    Whether a well defined law should exist is. A law without a way to understand when it's broken isn't a good law, that's not subjective.

    This is why this conversation is pointless.
     
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  10. R0H1T

    R0H1T New Member

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    Intel never paid that amount, they're still dragging the case through EU courts :mad:
    The lawsuit they settled with AMD in the US, without admitting guilt, could've been interesting because US anti trust suits can cost big money, of course AMD was in dire need of money at that time so they settled :eek:

    Then there's the (tens of) billions spent on contra revenues, no matter how you look at it history will not look at Intel kindly!
     

  11. Alienwarez567

    Alienwarez567 Active Member

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    Thank you AMD for helping to get cheaper hardware
     
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  12. Celcius

    Celcius Member Guru

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    I'd like to add to that a sincere "thank you" to everyone who elected to purchase AMD products during their lean years, so that they later had the opportunity to pull themselves out of the (often self-inflicted) mess that they found themselves in.

    Without that support, it's quite likely that none of dynamics that brought about the need to have this sort of discussion would have ever taken place.
     
  13. Astyanax

    Astyanax Ancient Guru

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    the people who continued buying those underperforming CMT cpu's were what kept them producing CMT cpu's.

    You don't reward a company that is releasing underwhelming products (and had their marketing guys lie about IPC on forums)

    Had people not done so, heads would have rolled sooner and they wouldn't have stuck to their guns with the poorly tuned bulldozer architecture and its derivatives.

    They should have cancelled desktop Fx and rearchitectured Phenom x6 with avx/sse4.
     
  14. FM57

    FM57 Member Guru

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    The slide seems really fake to me. Does not respect the Intel graphic style, and they never mention AMD directly, just as competition

    Very odd
     
  15. Celcius

    Celcius Member Guru

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    I see, so it was the people who chose to purchase the products that AMD had already committed investing their R&D resources into, that should not be viewed as an asset to AMD's survival, but were actually an underlying problem.

    And, had these same people not purchased pretty much the only thing AMD had to offer at the time, and, presumably, purchased an Intel product instead, it would have led to a more positive outcome for AMD, and for consumers in general?

    With respect, and without any desire to sidetrack this thread with discussions regarding microprocessor architecture and instruction-sets, I'll simply say that I believe we see this differently.
     
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  16. Astyanax

    Astyanax Ancient Guru

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    Your mistake is thinking Fx was the only product AMD had to sell,

    They were still producing Phenom II x6's well into the life of Fx, Fx was a financial mistake that cost AMD the market share they had aquired with Phenom.
    Real leadership at AMD would have cut the losses early in, and the writing was already on the wall with various former AMD architects coming out and talking about the various design failures with the architecture.

    The Phenom II 1100t outperformed the Fx 6300 in numerous cases and Fx left a sour taste that didn't need to be.
     
  17. cowie

    cowie Ancient Guru

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    adick tv? you know its not good news for intel or nvidia
    sorry there is only one Scotsman I listen to

     
    Last edited: Oct 15, 2019
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  18. ManofGod

    ManofGod Maha Guru

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    Those who do not learn from history are doomed to repeat it.
     
  19. wavetrex

    wavetrex Master Guru

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    Awesome !
     
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  20. ManofGod

    ManofGod Maha Guru

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    So, you are saying he is wrong? Care to elaborate on that? Whether you like, dislike or could care less about Nv, what they have done is paramount to stealing.
     

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