AMD Calls Check; Your Move, Intel

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Feb 14, 2017
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Something incredible has happened, for the first time in many years, there is an x86 microarchitecture out there that is going to pose a very real, and very significant threat to Intel’s monopoly in at least one major segment. I am talking of course, about AMD’s brand new Zen architecture, powering the all new Ryzen processors that are all set to hit the market by the end of this month. This isn’t a marketing buff or a nomenclature gimmick, the comeback is very much real. AMD is competitive again in the x86 scene and from everything we have heard so far, its going to massively undercut Intel in terms of pricing, marking the end of an era in computing (and the beginning of a price war).

A monopoly is broken: AMD’s highly competitive x86 Ryzen processors to enter the battle at a fraction of Intel cost

Amidst status quo shattering applause, AMD’s Ryzen processors will enter the arena this month. If you are a reader of Wccftech, you would know that we have already talked about pretty much all of the details concerning Ryzen. 8-core performance leaks have been coming for a long time now and they have not disappointed. The much cheaper Ryzen processor is able to go toe to toe with Intel’s $1000 chip which presents a very obvious problem for chipzilla considering the price difference. Intel will have to respond either by introducing new SKUs and/or by dropping the price of existing units. The public can see that the $329 Ryzen processor can do the job just as good as a $1000 Intel CPU, which means that the premium they have been charging for as a monopoly tax will quickly have to be removed.

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A price cut from Intel, is therefore anxiously anticipated. Even if one does come however, it will be too little, too late. Intel has been enjoying the high throne for quite some time now and is quite confident in its margins. All this however, is liable to change with the arrival of Ryzen CPUs. The only question is whether AMD can maintain supply at rates this cheap, and the answer to that, is given further down the article for anyone that wants to look.

We also saw that the processors have a high overclock potential, dependent almost entirely on the VRM of the board and the cooling system used. If a single core can hit 5 GHz on air, ignoring the effects of electromigration, then you can realistically expect cherry chips to overclock up to 3.8-4.2 GHz on all cores with a high-end cooler and a mature enough revision of the Ryzen processor. A Ryzen chip with a decent overclock will be able to give comparable performance to (and possibly even beat) Intel’s $1000 i7-6900 in optimized scenarios and match the i5s in gaming performance. So in short, we know the following things for sure about Ryzen:

  • The eight core Ryzen will have comparable optimized/threaded performance to the $1000+ Intel piece and comparable gaming/unoptimized performance to the quad-core i5 pieces. This is because any unthreaded application will rely mostly on the clock rate, at which Intel is currently ahead.
  • It will have overclocking potential.
  • Intel should still be in the lead in terms of pure IPC.
  • It will be half as cheap as its Intel counterpart (tentative pre-order pricing is at around $499). This is just a ridiculously good value proposition that no enthusiast will be able to ignore.
  • Lower attach and upgrade costs of the AM4 platform as compared with Intel’s Z270 platform.

This is very good news for any tech enthusiast waiting to go with a Ryzen build. All this information points to the fact that we are looking at a very real AMD comeback on the compute side of things. Ryzen is not only going to be a game changer for the company in terms of its profitability (in the long run) but also a status quo shattering product for the x86 industry at large. Keep in mind however, that caution is advised as far as raw gaming performance is concerned. Games usually are not capable of utilizing a lot of threads and instead rely on high clock rates, applications like server/enterprise and rendering farms however are going to benefit from the arrival of Ryzen a lot. That is the industry where it is truly going to be a game changer, providing Intel-level performance at 1/2-1/3 the cost.

AMD Ryzen CPUCores/ThreadsL3TDPBaseTurboXFRPrice
AMD Ryzen 7 1800X8/1616MB95W3.6GHz4.0GHz4.0GHz+$489
AMD Ryzen 7 1800 Pro8/1616MB65WTBATBAN/ATBA
AMD Ryzen 7 1700X8/1616MB95W3.4GHz3.8GHz3.8GHz+$389
AMD Ryzen 7 17008/1616MB65W3.0GHz3.7GHzN/A$319
AMD Ryzen 5 1600X6/1216MB95W3.3GHz3.7GHz3.7GHz+$259
AMD Ryzen 5 16006/1216MB65WTBATBAN/ATBA
AMD Ryzen 5 15006/1216MB65W3.2GHz3.5GHzN/A$229
AMD Ryzen 5 1400X4/88MB65W3.5GHz3.9GHz3.9GHz+$199
AMD Ryzen 5 14004/88MB65WTBATBAN/ATBA
AMD Ryzen 5 13004/88MB65W3.2GHz3.5GHzN/A$175
AMD Ryzen 3 1200X4/48MB65WTBA3.4GHz3.8GHz$149
AMD Ryzen 3 12004/48MB65WTBATBAN/ATBA
AMD Ryzen 3 11004/48MB65W3.2GHz3.5GHzN/A$129

Can AMD handle supply? Actually, that’s where the amended WSA comes in

The amendment is of a very material nature to the success of AMD (and Ryzen) but before we get into that it is interesting to point out that this is one of the more significant amendments to the WSA that has happened so far. It came almost a year after the amendment of 2015 and was officially filed as the “The Sixth Amendment to the Wafer Supply Agreement”.

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The initial point of the contract was to make sure that AMD continued to buy a set quantity of wafers from the foundry every year and not simply shift to other foundries after the spin off. With almost every amendment AMD has attempted to re-adjust the grip of the WSA and paid corresponding monetary compensation according to the terms for doing so. Unlike the previous amendments however, this particular contract changes quite a few things for the duration it will stay active. The original Wafer Supply Agreement stated that it will stay active no later than 2024, and this particular amendment will end on 2020.  One thing is for certain though, it would seem that AMD is not as confident in the capabilities of GlobalFoundries as it once might have been.

Zen is critical to AMD’s success and quite possibly its ability to stay afloat going forward. It can be argued that the company remaining a going concern depends on Zen not being a failure. With that context in mind, it is easy to see why AMD might be looking to diversify its options in case GlobalFoundries does not perform.

Since GlobalFoundries and Samsung share the same 14nm process, it is more probable that the amendment will be utilized to harness TSMC’s ability to create high powered SOCs at the 16nm FinFET node. This amendment will also serve as a fail safe option for AMD’s Zen processors – which are due to land sometime in early 2017. So basically:

 

  • AMD is free to source wafers from foundries that are not GlobalFoundries for any product it sees fit, provided it pays a penalty for every time this happens.
  • It will give the company an unparalleled and unprecedented capability to not only hedge its bet with GloFo but make sure it has a fall back if the foundry does not perform. This means that as far as the supply risk is concerned, Ryzen is fairly hedged.

You can also read our complete and thorough breakdown of the amended WSA agreement but I think readers will be able to see what I am talking about when I say that AMD has never been in a better position to support high demand for its products. With this amended WSA in place, the sky’s the limit as far as its ability to meet demand goes. I’ll end on the same note I began, AMD has made its move and it is most definitely a check. Whether this is also consequently a ‘mate’ for a colossal AMD win, depends entirely on how Intel chooses to react to it. Will it cut its pricing across the board in response or will it chose to do what it has always does with AMD processors (which is to say, nothing) and face the consequences?

 

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