Intel: The chipset is the product

On Sat, 05 Jun 2004 04:13:04 GMT, Robert Myers wrote:
It's fun to make fun of emotion- and probably hormone-driven gaming PC
buyers that you can feel superior to, I guess, but given a choice
between game PC buyers as an irrational decision maker (the desktop
supercomputer buyers) and the warehouse-sized supercomputer buyers with
a taxpayer credit card, I'll take the kids that want their cases to glow
as the better bet for the future of computing, thank you very much.

They don't hold press conferences to celebrate how smart they are for
spending $100 million on their last taxpayer-financed boondoggle or for
working out a deal that turns the availability of low-cost
university-owned real estate into an opportunity for personal fame with
a minimum contribution to science, and they don't expect the whole world
to recognize how important they are for owning computers that take up so
much real estate. The kids who want to have fun will eventually get us
just as much memory, just as many gigaflops, and just as much science as
the press-release generators and self-promoters, with a whole lot
smaller expenditure of taxpayer dollars and a whole lot less hot air.

There. Now I feel better. :-).

RM

It was a nicely purgative rant ;-)

KR Williams wrote:
In article S41wc.50391$Ly.31838@attbi_s01, rmyers1400
@comcast.net says...



Do you really think Intel could get the chipset marketing campaign for
free like that? For one thing, Intel tolerates licensed chipsets from
other manufacturers. If it intends to continue tolerating them, then it
needs to maintain reasonable relations with them, and suddenly declaring
that the "Intel Inside" moniker would not apply to boxes with licensed
non-Intel chipsets would be virtually a declaration of war on licensed
chipsets for Intel cpu's--probably not the message Intel wants to send
to anyone


With as many mistooks as Intel has made over the last couple of
years... Nothing would surprise me. What's the ServerWorks deal
all about anyway? ...Intel slitting their collective throat once
again, as I see it, anyway. Dumb! There is no money in
chipsets. They're simply a necessary evil.


The difference between Intel and its proprietary and jealously-guarded
frontside bus and AMD with hypertransport could hardly be more striking.

The benign interpretation of Intel's strategy is that Intel doesn't want
to have problems with chipsets blamed on its silicon. The dark
interpretation, which is supported by Intel's own public pronouncements,
is that Intel wants to use control of the processor as a wedge to
control as much of everything the processor eventually connects to as it
profitably can.

The strategy is unattractive, but I don't know that I would call it
dumb, at least in the short haul. Over the long haul, I'm not so sure,
but if I try to think about the long haul in this business right now, I
wind up with bigger questions than Intel's frontside bus strategy.

RM

In article k7Kwc.17468$%F2.10716@attbi_s04, rmyers1400
@comcast.net says...
KR Williams wrote:
In article S41wc.50391$Ly.31838@attbi_s01, rmyers1400
@comcast.net says...



Do you really think Intel could get the chipset marketing campaign for
free like that? For one thing, Intel tolerates licensed chipsets from
other manufacturers. If it intends to continue tolerating them, then it
needs to maintain reasonable relations with them, and suddenly declaring
that the "Intel Inside" moniker would not apply to boxes with licensed
non-Intel chipsets would be virtually a declaration of war on licensed
chipsets for Intel cpu's--probably not the message Intel wants to send
to anyone


With as many mistooks as Intel has made over the last couple of
years... Nothing would surprise me. What's the ServerWorks deal
all about anyway? ...Intel slitting their collective throat once
again, as I see it, anyway. Dumb! There is no money in
chipsets. They're simply a necessary evil.


The difference between Intel and its proprietary and jealously-guarded
frontside bus and AMD with hypertransport could hardly be more striking.

The benign interpretation of Intel's strategy is that Intel doesn't want
to have problems with chipsets blamed on its silicon. The dark
interpretation, which is supported by Intel's own public pronouncements,
is that Intel wants to use control of the processor as a wedge to
control as much of everything the processor eventually connects to as it
profitably can.

We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.

The strategy is unattractive, but I don't know that I would call it
dumb, at least in the short haul. Over the long haul, I'm not so sure,
but if I try to think about the long haul in this business right now, I
wind up with bigger questions than Intel's frontside bus strategy.

I repeat, *dumb*. Chipsets are no more than an necessary evil.

--
Keith

KR Williams wrote:
In article k7Kwc.17468$%F2.10716@attbi_s04, rmyers1400
@comcast.net says...

KR Williams wrote:


snip


With as many mistooks as Intel has made over the last couple of
years... Nothing would surprise me. What's the ServerWorks deal
all about anyway? ...Intel slitting their collective throat once
again, as I see it, anyway. Dumb! There is no money in
chipsets. They're simply a necessary evil.


The difference between Intel and its proprietary and jealously-guarded
frontside bus and AMD with hypertransport could hardly be more striking.

The benign interpretation of Intel's strategy is that Intel doesn't want
to have problems with chipsets blamed on its silicon. The dark
interpretation, which is supported by Intel's own public pronouncements,
is that Intel wants to use control of the processor as a wedge to
control as much of everything the processor eventually connects to as it
profitably can.


We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.


What you would attribute to cleverness on AMD's part, I would attribute
to necessity. Intel has the cash and the need to find applications for
what it does best (making silicon); AMD doesn't have the cash, and it
doesn't make silicon.

If you're cash-strapped, it makes sense to do what AMD is doing:
conserve resources and focus on the core business. If you're Intel and
trying to find things to do with money, then letting someone else make
anything you could make is just giving business away.

I can think of arguments either way as to whether the strategy Intel has
chosen is really the best choice for the interests of shareholders.
Those arguments rarely carry any weight. Corporations instinctively
hoard and reinvest cash with the goal of growing, whether hoarding and
reinvestment really correspond to wise management of shareholder
resources or not. The fact that the interests of management don't
necessarily and frequently just don't align with the interests of
shareholders *is* a problem of modern corporate capitalism.


RM

In article 7cbxc.15546$4S5.6605@attbi_s52, rmyers1400
@comcast.net says...
KR Williams wrote:
In article k7Kwc.17468$%F2.10716@attbi_s04, rmyers1400
@comcast.net says...

KR Williams wrote:


snip


With as many mistooks as Intel has made over the last couple of
years... Nothing would surprise me. What's the ServerWorks deal
all about anyway? ...Intel slitting their collective throat once
again, as I see it, anyway. Dumb! There is no money in
chipsets. They're simply a necessary evil.


The difference between Intel and its proprietary and jealously-guarded
frontside bus and AMD with hypertransport could hardly be more striking.

The benign interpretation of Intel's strategy is that Intel doesn't want
to have problems with chipsets blamed on its silicon. The dark
interpretation, which is supported by Intel's own public pronouncements,
is that Intel wants to use control of the processor as a wedge to
control as much of everything the processor eventually connects to as it
profitably can.


We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.


What you would attribute to cleverness on AMD's part, I would attribute
to necessity. Intel has the cash and the need to find applications for
what it does best (making silicon); AMD doesn't have the cash, and it
doesn't make silicon.

No question that AMD doesn't have the resources that Intel has on
hand. However, that doesn't change PC economics. Simply, there
is no money there other than in the CPU and OS. Diluting
resources to produce unnecessary (unnecessary if someone else can
be fooled into doing it) chipsets is a waste of capital.

If you're cash-strapped, it makes sense to do what AMD is doing:
conserve resources and focus on the core business. If you're Intel and
trying to find things to do with money, then letting someone else make
anything you could make is just giving business away.

I'm sure they could find a hole to bury a pot-full of cache.
That's pretty much what chipsets are. They've stubbed their toe
in every other endeavor, graphics in particular.

I can think of arguments either way as to whether the strategy Intel has
chosen is really the best choice for the interests of shareholders.
Those arguments rarely carry any weight. Corporations instinctively
hoard and reinvest cash with the goal of growing, whether hoarding and
reinvestment really correspond to wise management of shareholder
resources or not. The fact that the interests of management don't
necessarily and frequently just don't align with the interests of
shareholders *is* a problem of modern corporate capitalism.

--
Keith

On Mon, 7 Jun 2004 22:27:13 -0400, KR Williams wrote:

We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.

Intel has other motives here. Back in the late '486/early Pentium
days, when PCs were really starting to proliferate and production was
ramping madly, Intel found their sales could be limited by chipset
availability, and decided that the way to ensure all possible CPUs
could be sold early (when margins are highest) was to make sure the
chipset support was there.

Chipset production was basically a tool to ensure that CPU sales
weren't at the mercy of outside vendors, and it's worked very well for
them as a strategy. They're a low margin business, but they enable
the high margin business.

It also helps guarantee compatibility and reliability (with a few
well-known exceptions), and the chipsets are manufactured on older
technology production lines that aren't capable of making the latest
CPU geometries, so it allows reuse of already depreciated resources.

Sure, they've messed it up a few times, but overall, it's been very
effective.


Neil Maxwell - I don't speak for my employer

Neil Maxwell wrote:
Intel has other motives here. Back in the late '486/early Pentium
days, when PCs were really starting to proliferate and production was
ramping madly, Intel found their sales could be limited by chipset
availability, and decided that the way to ensure all possible CPUs
could be sold early (when margins are highest) was to make sure the
chipset support was there.

Chipset production was basically a tool to ensure that CPU sales
weren't at the mercy of outside vendors, and it's worked very well for
them as a strategy. They're a low margin business, but they enable
the high margin business.

I think AMD has the same strategy these days. For the last two generations,
the K7 and K8 lines, AMD has always introduced its own chipsets first, and
then stepped back once the third party chipsets came online. I guess it's
two ways of achieving the same results.

Yousuf Khan

In article ,
says...
On Mon, 7 Jun 2004 22:27:13 -0400, KR Williams wrote:

We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.

Intel has other motives here. Back in the late '486/early Pentium
days, when PCs were really starting to proliferate and production was
ramping madly, Intel found their sales could be limited by chipset
availability, and decided that the way to ensure all possible CPUs
could be sold early (when margins are highest) was to make sure the
chipset support was there.

....long ago in a Galaxy far, far, away. Intel went into the
chipset business to promote PCI (and because the rest sucked
bilge-water). They then stumbled badly too (RZ1000?).

Chipset production was basically a tool to ensure that CPU sales
weren't at the mercy of outside vendors, and it's worked very well for
them as a strategy. They're a low margin business, but they enable
the high margin business.

Work*ED* is the operative. Scaring away chipset builders is
*DUMB*, I don't care who your employer is. There is no money to
pump here. ...you're already doing all you can.

It also helps guarantee compatibility and reliability (with a few
well-known exceptions), and the chipsets are manufactured on older
technology production lines that aren't capable of making the latest
CPU geometries, so it allows reuse of already depreciated resources.

That was true ten years ago. Hell even graphics chips were done
on antique lines ten years ago. Things change. Modern chipsets
have the same issues as processors today.

Sure, they've messed it up a few times, but overall, it's been very
effective.

"Effective" is a fungible term. Building chipsets isn't
profitable, though *sometimes* necessary. ****ing those off
building the unprofitable parts for *YOU* is *DUMB*.

Of course you Intel folks may have some other motive.

--
Keith

On Tue, 08 Jun 2004 11:19:11 -0700, Neil Maxwell
wrote:
On Mon, 7 Jun 2004 22:27:13 -0400, KR Williams wrote:

We see this differently. There is only so much money that can be
spent on the CPU and it's necessary attachments. Every dime that
is spent on the attachments is a dime that cannot be charged for
the CPU. This is where I think Intel is *dumb*. The know they
can dictate to the chipset manufacturers, so why go through the
grief? Indeed, if they play one against the other they wind up
with the whole pot, minus the production costs. Capitalism at
work. AMD certainly figured this out, since they got out of this
losing market.

Intel has other motives here. Back in the late '486/early Pentium
days, when PCs were really starting to proliferate and production was
ramping madly, Intel found their sales could be limited by chipset
availability, and decided that the way to ensure all possible CPUs
could be sold early (when margins are highest) was to make sure the
chipset support was there.

Err, yeah, I think that's what the "necessary evil" comment Keith made
was all about.

Chipset production was basically a tool to ensure that CPU sales
weren't at the mercy of outside vendors, and it's worked very well for
them as a strategy. They're a low margin business, but they enable
the high margin business.

It also helps guarantee compatibility and reliability (with a few
well-known exceptions), and the chipsets are manufactured on older
technology production lines that aren't capable of making the latest
CPU geometries, so it allows reuse of already depreciated resources.

Sure, they've messed it up a few times, but overall, it's been very
effective.

Effective for consumer chipsets, sure, but this whole discussion
started with the high-end server chipsets where Intel has been failing
miserably for 5 years and is now looking to become the ONLY supplier
in the business.

Take a look at the 2-way and greater servers from all the major OEMs.
HPaq doesn't have a single Intel chipset in the bunch, all Serverworks
for 2 and 4 way with their own customer job for 8-way setups. IBM is
pretty much the same story. Dell, forever the Intel stalwart, has
something like 1 or 2 of their 2-way servers using Intel chipsets, but
the bulk use Serverworks and all of their 4-way servers are
Serverworks chipsets.

However now Intel has declined Serverworks license for future
chipsets, meaning that all of those servers from all of the major OEMs
need to switch to an Intel chipset for future designs. What's even
worse though, there is no Intel chipset for them to switch to! Intel
has yet to release a 4-way (or greater) chipset for their P4-style
Xeons.

In short, Intel is largely shooting themselves in the foot. Their
performance in the 4P server market absolutely stinks vs. the Opteron,
largely because they are limited to 4 processors sharing a 400MT/s
bus. They can't increase that, not because they don't have the
processors for it but because they don't have their own chipset and
refuse to let Serverworks build one for them. Even in 2-way servers,
where the margin by which the Opteron beats them is slightly less
embarrassing, they're still stuck at a 533MT/s bus speed and forcing
all their customers to trash existing designs in favor of an untested
Intel solution. For the moment their only solutions in this market at
the e7505 chipset (limited to 533MT/s bus speeds for now at least) and
the i875P (no PCI-X support and limited memory capacity for a server).

-------------
Tony Hill
hilla underscore 20 at yahoo dot ca

Tony Hill wrote:

[SNIP]

Intel solution. For the moment their only solutions in this market at
the e7505 chipset (limited to 533MT/s bus speeds for now at least) and
the i875P (no PCI-X support and limited memory capacity for a server).

IBM and Unisys build their own chipsets, and they are pretty meaty. I
would like to see a comparison between one of them fancy 4P in-house
chipset boxes and an Opteron box. IBM reckon they can go to 32 way,
believe it when I see it I guess. :P

Cheers,
Rupert