Intel found to be abusing market power in Japan

On Tue, 15 Mar 2005 11:46:19 -0500, Yousuf Khan
wrote:

Robert Myers wrote:

Yeah, exactly what my point was, the auto industry got reinvigorated
with globalization, and I expect that the next CPU powerhouse will be

from outside the US as well. My bets are on China producing the next

one. However the Europeans have some established chip companies that may
be able to grow depending on European government support. The Chinese
one will also require government support.


But the challenges there are mind-bending.

A lot of the brain-power has already been exported out to the US and
other countries. They can just as easily re-import them, with some
incentives. For example, Stephen Chen who was Seymour Cray's protege and
then eventually his rival, is now back in China working on supercomputer
designs for them.

The problems are much more basic: lack of road and rail transport,
lack of reliable electricity, illiteracy, corruption, crime, poverty,
overpopulation,...

There was a guy on "Car Talk" over the weekend who is in the software
business in Brazil. There are some really sharp people in Brazil, but
this guy talked about the fact that the government doesn't really have
control of large parts of Rio de Janeiro. He wanted advice on getting
his car bulletproofed.

I know, the government doesn't really control parts of New York and
Los Angeles, either, but it's a different level of problem.

China, Brazil, India, wherever,...they have all the brainpower they
could ever need. MIT will happily educate their sons and daughters,
if necessary, and it increasingly isn't necessary. Much of that
talent will be wasted, though, because the resources aren't available
to exploit it.

Oh another example from another industry. Boeing was headed for a global
passenger plane monopoly (Lockheed, MD, all got consolidated out), until
Airbus got some long-term European government support and took it on.



There is no free market in aerospace. The Europeans claim that the US
susidizes its aerospace industry with military procurement (true) and
the US aerospace industry claims that Airbus Industrie is subsidized
in ways that are not available to, say, Boeing (also true). On top of
that, there is a documented history of industrial spying, bribes, and
influence peddling that make the alleged Intel pecadilloes seem
insignificant by comparison. And the US government picks winners and
losers. The semiconductor business is remarkable for having been
_relatively_ free of all that nonsense, certainly as compared to
aerospace.

Yes, so far, the US government hasn't overtly preferential in the CPU
business, it tries from time to time to give contracts to AMD-based
hardware too (e.g. supercomputing). But of course the US gov is in the
same boat as every other business that needs to buy PCs, in that it's
dependent on purchasing whatever models of computers that manufacturers
offer, which is usually only Intel-based.


Actually, Yousuf, we may be onto the real reason I admire Intel: they
don't have to suck up to the morons at agency deleted and agency
deleted, and they really don't whether bureaucrat deleted is
impressed with their processors or not. That's why I can't get
excited about Intel's relatively modest forays into market
manipulation. I've known businesses that are essentially 100% market
manipulation.

The world has been hurt by Intel's swaggering capacity to thumb its
nose at whoever it wants to? Would you like to buy a space shuttle?

RM

Robert Myers wrote:

There are some really sharp people in Brazil, but
this guy talked about the fact that the government doesn't really have
control of large parts of Rio de Janeiro. He wanted advice on getting
his car bulletproofed.

Check out the movie "City of God" sometime.

Robert Myers wrote:
Whatever the contract says, I'd be bug-eyed to see AMD go after Intel
in court. It would make as much sense as a New York or Chicago
gangland turf war. Why would anybody want to mess with a good deal,
especially now that AMD looks much less insecure than it once did?
AMD may not really want to mess with Dell, either, since I suspect
that the concessions that Intel offers there make it a pretty
unattractive customer.

I'm not sure why you think AMD is now in a comfortable position
vis-a-vis Intel. Intel certainly isn't conceding any marketshare to
AMD, it's always trying to grab as much of it as possible. I absolutely
expect AMD to sue Intel after this, and I would be bug-eyed to find out
that they aren't going to sue them. We haven't seen a good Intel-AMD
lawsuit in a number of years, mainly because they called a ceasefire --
not peace.

Intel Caught With Its Chips Down
http://www.arabnews.com/?page=11&sec...=15&m=3&y=2005

This interview makes it clear that AMD isn't ruling out a lawsuit
against Intel.

Yousuf Khan

On 15 Mar 2005 13:42:23 -0800, "YKhan" wrote:

Robert Myers wrote:
Whatever the contract says, I'd be bug-eyed to see AMD go after Intel
in court. It would make as much sense as a New York or Chicago
gangland turf war. Why would anybody want to mess with a good deal,
especially now that AMD looks much less insecure than it once did?
AMD may not really want to mess with Dell, either, since I suspect
that the concessions that Intel offers there make it a pretty
unattractive customer.

I'm not sure why you think AMD is now in a comfortable position
vis-a-vis Intel. Intel certainly isn't conceding any marketshare to
AMD, it's always trying to grab as much of it as possible. I absolutely
expect AMD to sue Intel after this, and I would be bug-eyed to find out
that they aren't going to sue them. We haven't seen a good Intel-AMD
lawsuit in a number of years, mainly because they called a ceasefire --
not peace.

Intel Caught With Its Chips Down
http://www.arabnews.com/?page=11&sec...=15&m=3&y=2005

This interview makes it clear that AMD isn't ruling out a lawsuit
against Intel.


The rhetoric is certainly bellicose. I'm not a lawyer. If I ever
wanted to be a lawyer, it certainly was not to be involved in messes
like this one...

There are no spoils of war to divide up. Opteron didn't open up any
new vistas. The business is in a period of decline and consolidation.

Were I AMD, I would use this situation to reposition myself vis-a-vis
Intel by way of some agreements cut on the sly in some out-of-the-way
place, not by going to court. That's what I would do. What AMD does,
of course, is completely independet of my guess as to what they should
do.

RM

Robert Myers wrote:
The rhetoric is certainly bellicose. I'm not a lawyer. If I ever
wanted to be a lawyer, it certainly was not to be involved in messes
like this one...

There are no spoils of war to divide up. Opteron didn't open up any
new vistas. The business is in a period of decline and consolidation.

Huh? Since when? This is the biggest and most profitable end of the
semiconductor industry, of course there's spoils of war to divide up
here -- lots of it. Of course, it's all AMD's to gain and all Intel's to
lose.

Besides, the dividing of the spoils of war analogy also doesn't work
here. Dividing spoils of war involves two or more allies defeating an
enemy and dividing the enemy's territory amongst themselves. AMD and
Intel aren't an allied force going up against a common enemy; they are
each other's enemy, and in this case the territory all belongs to Intel
and it is defending itself against an invading AMD.

Were I AMD, I would use this situation to reposition myself vis-a-vis
Intel by way of some agreements cut on the sly in some out-of-the-way
place, not by going to court. That's what I would do. What AMD does,
of course, is completely independet of my guess as to what they should
do.

That's also illegal. It also falls into the same anti-trust laws, it's
collusion. It's no different than if AMD and Intel decided to one day
start pricing their processors exactly the same as each other at exactly
the same time -- this would be price-fixing. The other thing would be
marketshare-fixing.

Yousuf Khan

On Tue, 15 Mar 2005 18:36:39 -0500, Yousuf Khan
wrote:

Robert Myers wrote:
The rhetoric is certainly bellicose. I'm not a lawyer. If I ever
wanted to be a lawyer, it certainly was not to be involved in messes
like this one...

There are no spoils of war to divide up. Opteron didn't open up any
new vistas. The business is in a period of decline and consolidation.

Huh? Since when? This is the biggest and most profitable end of the
semiconductor industry, of course there's spoils of war to divide up
here -- lots of it. Of course, it's all AMD's to gain and all Intel's to
lose.


Tell that to Wall Street. Don't waste your time with me.

The high tech sector may take decades to get back to where it was
pre-bust. These are _not_ good times.

There's this thing called efficient market theory. You think you got
the landscape scoped better than the market, go make yourself rich.

Besides, the dividing of the spoils of war analogy also doesn't work
here. Dividing spoils of war involves two or more allies defeating an
enemy and dividing the enemy's territory amongst themselves. AMD and
Intel aren't an allied force going up against a common enemy; they are
each other's enemy, and in this case the territory all belongs to Intel
and it is defending itself against an invading AMD.

Were I AMD, I would use this situation to reposition myself vis-a-vis
Intel by way of some agreements cut on the sly in some out-of-the-way
place, not by going to court. That's what I would do. What AMD does,
of course, is completely independet of my guess as to what they should
do.

That's also illegal. It also falls into the same anti-trust laws, it's
collusion. It's no different than if AMD and Intel decided to one day
start pricing their processors exactly the same as each other at exactly
the same time -- this would be price-fixing. The other thing would be
marketshare-fixing.


That's how your mind works, apparently. AMD can sue Intel (not smart,
in my opinion), or it can come to some kind of agreement about the
rules of engagement. Such a thing could be a consent decree
supervised by a judge. It doesn't have to be public and it doesn't
have to be illegal. AMD and Intel would be colluding to keep, say,
Via out? I'd hope they wouldn't be so stupid.

RM

On Mon, 14 Mar 2005 21:46:38 -0500, Yousuf Khan wrote:

George Macdonald wrote:
Did we completely dispense with China? I don't remember the thread
and I can't find it.


To do with cultural, social, economic err, immaturity?... an "adolescent"
society is what I seem to recall you used - no? At any rate I don't see
them as a big threat - they've been put in their place on their Wi-Fi rogue
"standard"... fortunately for them in the long run. Basically they've
shown themsleves to be pretty adept at buggering up a good thing with weird
socio-political moves.

Well, I don't know about how adolescent of a society they are. They've
shown themselves to be quite mature at growing their economy with adept
management, while their fellow Communist state, the Russians, have known
nothing but bad management until now.

Adept? AFAICT it's been spoon-fed to them every granule and molecule of
the way. A few favored "sons" were allowed to intern in the U.S. and have
been allowed the privilege of an "enterprise" operation... as long as they
toe the line. As your average city dweller hacks away at a lump of coal in
the street, to keep him warm overnight, one *does* wonder what goes through
his mind as he watches the meritocrats sweep past in their M-Bs, BMWs,
Lexus on their way to their luxu-condo in the purpose built
Western-emulation of the suburbs?? Talk about little red books and their
genesis!

As for the Russians, and their Eastern bloc "allies", their problem is the
rampant corruption which went from seedling under Communism to the sole
economic driving force under their present "system". Err, criminals tend
to not report their umm, incomes.:-)

I don't want to rouse sleeping dogs here, but I
just wish to hell they'd get on with oil exploration & production, instead
of keeping in in the bank.... err, ground.

Oh don't you worry, we up here in Canuckistan have as much oil locked up
in our little tar sands as the entire global reserve (or something like
that). Once the price of oil gets to a certain level (fast approaching
now), we'll actually be able to extract it economically for you guys. :-)

Trouble is its return on energy-in is kinda low - not much above 1.0 as I
hear it... and the way things are moving the Greens are going to stick
their noses in there - tailor-made for them.

Whatever the contract says, I'd be bug-eyed to see AMD go after Intel
in court. It would make as much sense as a New York or Chicago
gangland turf war. Why would anybody want to mess with a good deal,
especially now that AMD looks much less insecure than it once did?
AMD may not really want to mess with Dell, either, since I suspect
that the concessions that Intel offers there make it a pretty
unattractive customer.


I agree - a court case would be a horrible affair with only losers,
financially and morally, in the end.

So you're expecting an out of court settlement between the two? I can't
see AMD even having the option of keeping this out of the civil system,
once the indictment is upheld. AMD has been telling governments around
the world how much Intel is keeping it out of the markets. Here once a
government finally agrees, it's just going to shut up about it?

I don't know how it'd sit as far as fiscal responsibility with shareholders
in general goes but a court action has a stink all of its own... success
often goes to the moral loser, if not a trial, at appeal... C.F. RMBS. Out
of court settlement seems like the only way. I certainly don't see the
U.S. govt. clobbering Intel with an anti-trust suit.

--
Rgds, George Macdonald

On Tue, 15 Mar 2005 05:17:25 -0500, Robert Myers
wrote:

On Mon, 14 Mar 2005 17:02:19 -0500, George Macdonald
wrote:

To do with cultural, social, economic err, immaturity?... an "adolescent"
society is what I seem to recall you used - no?

That sounds right. American society was adolescent, too, when it grew
and innovated its way into being an industrial and technological
giant. Didn't have the huge population and poverty of China, though.

No comparison - the ingrained socio-political system is at opposite poles.

At any rate I don't see
them as a big threat - they've been put in their place on their Wi-Fi rogue
"standard"... fortunately for them in the long run. Basically they've
shown themsleves to be pretty adept at buggering up a good thing with weird
socio-political moves.

It is really hard to imagine how China manages to maintain stability,
but I wouldn't rule out nationalism and militarism as forces that
could drive a successful technology push.

We've already seen how that works... time and time again. Hell those
systems have a hard time getting the supply of basics [food, clothing &
shelter] working.

I don't want to rouse sleeping dogs here, but I
just wish to hell they'd get on with oil exploration & production, instead
of keeping in in the bank.... err, ground.

Another thing the energy modelers left off in the early going: the
cost of capital to exploit resources that are available. ;-)

What?... no pork barrel in China? Hard to believe! No, this is an oil
banking scheme IMO - IOW live off the Western-style established
infrastructure until the strain is palpable.


I mean, _who_ is going to outfit the world with PC's? Not Dell,
surely. The margins are going to be miserable, and Intel-style
marketing probably won't do it.

The only really pressing requirement for performance will be
throughput, something that Via has been able to deliever on. In this
brave new world, no one will care how fast a processor compiles the
linux kernel. We may miss most of this action, because it will be
taking place in other markets, but it's hard to believe that the
effects won't eventually wash up on the shores of North America and
Western Europe.

I'm sure VIA has found a niche in the developing economies but as for
China, I'd think their processors would lack the oomph required to do
Chinese caharacter sets. I've seen this in action and even a "text"
document drags the CPU down horribly... not sure how it all works out.

Taiwan and Japan seem to cope somehow. Back to the cost of capital
issue, building a microprocessor industry doesn't seem like a wise
investment for China, except to satisfy their miliary ambitions, which
they do have.

I was talking about the relative power of current VIA CPUs and their
ability to handle the job... which drags an Athlon XP 2500+ down pretty
badly. IOW I don't see how VIA satisfies the reqts for even the basics of
word processing, browsing etc. in Chinese chgaracters.

--
Rgds, George Macdonald

On Mon, 14 Mar 2005 23:56:11 GMT, Robert Redelmeier
wrote:

George Macdonald wrote:
I'd sure like to know what the royalty levels are that AMD
is paying Intel though.

Who says the money is flowing in that direction?

AMD is probably paying Intel royalties on the EV [Alpha] bus.
AFAIK, full-design royalties run 4% of sales, partial usage
much less. I'd expect AMD to be paying 1% or less.

It's in the agreement - see the URL I gave. AMD pays Intel a royalty per
CPU, on a sliding scale, for access to Intel's x86 technology's patent
portfolio.

Well so far Dell is not suffering... are the others so incompetent?

Dell hasn't suffered so far because Intel has been nice to them.

The new AMD notebook chips could be the key... if they're any
good. I am absolutely convinced that Intel's enthusiasm for
"platformization" based on the "Centrino success" is a total
misread. People don't buy notebooks because of Centrino.

Well, Centrino probably has been a marketing success. Is your
corp-speak to English translator broken? "Centrino success"
means "mobile Pentium4 cratered". And the PentiumM CPU of
Centrino is a P6, much closer to an Athlon than a Pentium4.
I suspect that AMD has a few tricks [patents] Intel wants.

The way I read it, Intel's marketroids are convinced their Centrino moniker
was a stroke of genius, which made *all* the difference in the Pentium-M
success... to the extent that "Desktrino" (apparently the internal name) is
in the works. My translator is not broken but I disagree strongly...
Intel's corporate culture is certainly broken though but we'll see.

--
Rgds, George Macdonald

On Mon, 14 Mar 2005 21:57:48 -0500, Yousuf Khan wrote:

George Macdonald wrote:
The importance of X-licence isn't new. For many years,
nobody would design something without a second-source of
all parts. Why has Dell (et al) never learned?


Well so far Dell is not suffering... are the others so incompetent?

Yeah, the second-source model is a relic of ancient times, when silicon
output was a relative trickle compared to now. The mass production era
of IC production was barely underway when IBM decided that Intel needed
an AMD second source. Dell is operating from an era when IC's were
already commodity and their manufacturing process had become fairly well
understood.

I thought it was the U.S. military that insisted on the 2nd source for
x86s?

The
new AMD notebook chips could be the key... if they're any good. I am
absolutely convinced that Intel's enthusiasm for "platformization" based on
the "Centrino success" is a total misread. People don't buy notebooks
because of Centrino.

Intel is enthusiastic about the platform because it gets to bundle sales
of chipsets with processors together.

Intel has always been the principal suppiler of chipsets into the notebook
market almost without exception. How many non-Intel chipsets are in
notebooks with an Intel CPU? The NIC is pennies-worth to them. Note that
they resisted the hubris of including Extreme Graphics as part of the deal.
Everything I read indicates that Intel's marketroids see it as a grand
marketing coup of brand/name recognition... nothing of the sort IMO.

Personally I've bought 5 Centrino notebooks and Centrino had nothing to do
with the purchasing decision; in fact if a similar system had had a Cisco
NIC it would have been neither here nor there to me. If there had been a
notebook with similar *features* in a well designed case with an AMD CPU
I'd have bought that. Specifically, AMD just didn't have the battery life
or come in a quality case and with the vendor cachet for overall design or
support.

If I lived in Europe I'd have taken a serious look at the Fujitsu-Siemens
AMD systems but they are not an option in the U.S.... possibly because of
the Intel rules/incentives (choose one)?? Things *are* changing though:
until recently, it was difficult to get a WinXP Pro system with an AMD
notebook.

--
Rgds, George Macdonald