AMD & Intel

An interesting commentary by BusinessWeek on how AMD is getting ready to strike back at someone it has been overshadowed for all these years - Intel. Also, a glimpse of the Goliath as it stands today up against AMD. Some excerpts:

The triumph:

Wave goodbye to the great imitator. In what may prove to be an historic reversal of fortune, AMD Chief Executive Hector de Jesus Ruiz has grabbed the momentum from his giant rival in recent months and left Intel scrambling to catch up. The perennial underdog was first to market by more than a year with a new class of microprocessors that's proving extremely popular with corporate clients. It has smoothly launched new manufacturing techniques, while Intel has been plagued with an uncharacteristic string of delays, glitches, and recalls. And it pushed forward so aggressively with a new "multiple core" chip design, which squeezes several processors on one chip, that Intel was forced to speed up its own transition on some chips by as much as two years. In a humbling moment, Intel executives announced the acceleration at the Intel Developer Forum on Sept. 7, a week after AMD showed off a working version of its own multiple core processors. "We've had some fumbles," says Intel President Paul S. Otellini.

AMD is making the most of its newfound edge. The Sunnyvale (Calif.) company has grabbed 7% of the low-end server market, up from almost nothing two years ago. It passed 50% of the U.S. retail store sales for desktop PCs in recent weeks. And the company is using new manufacturing techniques in the memory-chip market to outgun rivals both on cost and technology, analysts say. When Intel shocked Wall Street on Sept. 3 by slashing its forecast for third-quarter sales and profit margins, the chip giant cited "lower than expected worldwide demand." But AMD says it's seeing no indication of a broad slowdown, and analysts say that Intel's troubles have been exacerbated by its pesky rival. "It's clear they don't have the products that customers want today," says Ruiz. "That's just the way it is."

However:

Can Ruiz keep going toe to toe with Intel? It would be a small miracle. Intel has so much more heft, money, engineering talent, and other resources that, with a determined effort, it should be able to turn back AMD in short order. Intel is almost seven times as large, with expected revenues of $34 billion this year. Its projected 2004 profits of $7.35 billion mean that Intel earns in 11 days what AMD will make all year. And Intel is sitting on $14 billion in cash, compared with $1.1 billion for AMD, giving Intel a vast edge in funding research and development and in constructing cutting-edge manufacturing facilities.