Intel gets raided by the EU!

[ethernal]

I have to admit that I find the investigation rather interesting. While I'm not acquitting Intel of backdoor deals, and there is a good chance that some form of prosecutable anti-trust violation exists, I don't think there will be a great deal to go on.

People always wondered why Intel managed to maintain market share. And the reason is simple: they provided on time and they actually could provide. AMD, when A64 was released, had a reputation for delays and manufacturing problems that made them miss target delivery dates for products. That is why, at first, OEM's did not buy AMD products when they became superior to Intel's for an extended period of time during the Netburst fiasco.

When people did finally begin demanding AMD's product, because of its far superior performance and efficiency, AMD couldn't supply it. Remember when X2's cost $380 for a 3800? Or $600 for a 5000+? AMD was producing as many X2's as they could with their constrained capacity and was able to sell them at outrageous prices. The share of lower end AMD chips (while still large due to previous commitments and a desire for market share) decreased during the 2004-2006 timeframe and AMD focused on server and higher end desktop chips. But the simple fact of the matter was that they didn't have the capacity that Intel could provide. Even if OEM's wanted to use AMD systems, they ran into problems with how many chips they could get their hands on at a price that they wanted. For a new platform and new supplier to become cost effective, a certain volume of shipments must be reached. If AMD couldn't supply the number that an OEM required, then it was a no-go for the OEM. Simple as that. Dell enjoyed their massive and arguably "questionable" high-volume Intel prices and it probably wouldn't have been cost-effective to use AMD chips if they couldn't provide enough at a price that would match their low-priced Intel shipments for dedicating an entire new product line and platform. A new product line means more inventory (that will eventually have to be marked down if it can't get sold), more R&D (as ridiculous as it sounds for a PC builder), as well as product line confusion amongst clients, which is especially prominent in a company that does a lot of direct-to-small-customer sales like Dell. Simply put, Intel had an advantage in the ability to deliver, both in history of delivering as well as the volume available to deliver.

Finally, whether or not we like to admit it, people are stupid (or simply apathetic, or a mixture of both, take your pick). Intel is a strong brand, and still is. Having a strong brand means that even if you don't always have the best product, you can still maintain a market foothold. It won't last forever, but it can provide a band-aid to cover a bad period of time when it comes to products. Take, for example, the former strength of US auto manufacturers that allowed them to sell an inferior product at an inflated price because no one wanted "foreign rustbuckets." Is it fair or truly competitive? No, but it's the way things work, especially in a duopoly of an oligopoly that most large industries exist as.

[duploxxx]

q6600 g0 costs more than $266usd each to manufacture? not likely.

you really have no clue what is going on in huge OEM sales world do you... if i would tell you the prices at which rate my firm buys cpu's and systems from large oem's you will feel ripped all the time and will never buy a system.

[strange|ife]

pretty low blow.

and where are these 266$ USD chips? The lowtest ive seen lately is around the 280 mark...has been this way for a few months now.

this suit is frivolous

[saaya]

Intel gets raided by the EU!

again?

*police enters intel office*
Intel employee: "hey jim, hey jack, hey sarah... how are your kids?"
police man1: "hey joe, sup man? hey do you still have the terminator3 dvd i gave you during last weeks raid? frank wants it, so would be cool if you can return it"
Intel employee: "no, you gave it to me at the raid 3 weeks ago, and i passed it on to frank already during last weeks raid"

[Jakko]

Some of the replies in this thread are mind staggering.

By making shady deals with companies like Dell, Intel made sure AMD now has a LOT less money.
What Intel did, goes against fair competition, innovation, and more importantly, fair prices for your computer parts.

Intel should pay for their illegal actions, and AMD should be getting a part of intels 2000 profits.

[FischOderAal]

I don't think Intel has been selling it's processors under production costs for years. I think what's bothering the EU is that Intel made special contracts if the pc builders sell "Intel only"

[KTE]

Well here's a litigation and now we'll wait to see if there is any proof found for it...

[Syn.]

if AMD wants to stop failing, they could just spend some time looking for who to boot to better their efficiency? I'd kick hector's dumb ass out of office and find a competent CEO.

Before Hector came AMD had A64 which owned P4 chips and even after years of having a superior CPU AMD made little to no progress in x86 market share.

So your comment is unjustified. The only reason why companies are making even smallest efforts with K10 CPU's is because Intel is now under review and they can not afford to do deals like they did before.

[RADCOM]

Some of the replies in this thread are mind staggering.

By making shady deals with companies like Dell, Intel made sure AMD now has a LOT less money.
What Intel did, goes against fair competition, innovation, and more importantly, fair prices for your computer parts.

Intel should pay for their illegal actions, and AMD should be getting a part of intels 2000 profits.

Indeed! Some folk seem to want to drive without the car in gear.......
I sometimes wonder if it is natural for business and other groups with some sort of power to act outside the rules we set down for them.

[STaRGaZeR]

Indeed! Some folk seem to want to drive without the car in gear.......
I sometimes wonder if it is natural for business and other groups with some sort of power to act outside the rules we set down for them.

If it produces more money, then yes of course.

[Machinus]

again?

*police enters intel office*
Intel employee: "hey jim, hey jack, hey sarah... how are your kids?"
police man1: "hey joe, sup man? hey do you still have the terminator3 dvd i gave you during last weeks raid? frank wants it, so would be cool if you can return it"
Intel employee: "no, you gave it to me at the raid 3 weeks ago, and i passed it on to frank already during last weeks raid"

lolol

[ethernal]

Some of the replies in this thread are mind staggering.

By making shady deals with companies like Dell, Intel made sure AMD now has a LOT less money.

Once again, I am not saying that Intel did not partake in antitrust violations. There is certainly a possibility that they did, and as I said, I am sure that if the EU investigators dig deep enough, they will find something to prosecute them with. There are a couple of things that are important to understand. First, exclusivity deals are not inherently illegal. They are used across many facets of industry. Exclusivity deals become illegal when a company has control of enough of the market that they can effectively stifle competition through their exclusivity deals. That is what Intel is most likely being investigated for, and it's a somewhat of a gray area. The EU has been pretty anti-trust sue happy against foreign companies, so there is a good chance that Intel will face some kind of punishment for whatever is turned up. This is simply because virtually any exclusivity deal could be considered as exploiting their market position. To say that such deals are inherently "shady", however, is a misnomer because exclusivity deals are such a common part of business. Obviously, Intel should know that they have to tread lightly because of potential anti-trust accusations, such as what we are seeing now. That is why I doubt that there will be anything huge to turn up.

What Intel did, goes against fair competition, innovation, and more importantly, fair prices for your computer parts.

Intel should pay for their illegal actions, and AMD should be getting a part of intels 2000 profits.

I find it ironic that someone claiming that AMD should be receiving a part of Intel's profits for ruining fair prices. When AMD had position on Intel, they milked their products for everything they were worth. Remember the $700 X2 5000+? Here's a little secret I'll let you in on: companies are out there to make money. While some companies may act slightly more moral than others when it comes to treatment of employees or whatever, for the most part, companies can be considered evil. There is nothing special about AMD that makes them "nicer", other than the fact that we perceive them as the cute David fighting Goliath. There is nothing special about Intel that makes them great, other than that they managed to get in at the right time on the right market to become a powerful company. Both are just companies that are trying to design a product that you will buy. Not to make you happy, but to make money.

The simple fact of the matter is that you're not going to have real good competition in a duopoly. In a truly competitive market, the good being produced is effectively a commodity with virtually identical properties. Truly competitive markets haven't existed for a long time, if they ever did. Most large industries (oil, motor, financial, and in this case, x86 processors) are controlled by a couple of large companies in an oligopoly. The x86 field is relatively special because it is a duopoly, which is pretty rare in modern industry.

Anyways, the biggest reason why AMD didn't gain market share from 2004-2006 when they had a far superior product is because they simply didn't have the capacity. I'm not saying that Intel didn't stifle competition, because they did. It's their job to. They don't want to let AMD get a foothold. They want to have the largest market share possible with the highest profits possible. They want to tread the line between legality and anti-trust violations, which is where this investigation comes in.

Take a look at this market share graph:


Notice something? Prescott was launched Q1 2005, with real volume hitting late Q3. Intel's market share took a nosedive, but who picked up the slack? It was VIA, not AMD. The reason was because AMD was trying to supply 20% of the x86 market with a single 200mm fab. Their market share increased to 21% and then couldn't move, simply because they were already pushing Fab 30 to its limits. It was running far over capacity, and it is truly an achievement that they were able to produce as many chips as they did. Fab 36 began shipments of processors in Q1 '06, with real volume hitting Q2-Q3. Notice how market share darts up to 25% in only half a year? They were no longer capacity constrained and their market share grew. Unfortunately for AMD, Intel actually released a competitive product. They were about a year too late with Fab 36. If they had managed to finish it sooner, things could very well be far better for AMD than they are now.

That is the primary cause of the market share stagnation of AMD during the Netburst era. Intel may have been stifling competition, but to be honest, it wouldn't have hurt AMD much. They were selling as many processors as they could make.

[Yoxxy]

Hello 1999!

[saaya]

the problem with this really is, that the mfg costs are tiny, less than 50$, but you cant look at it that way cause you need to pay for research and testing, qualification and the fab etc.

so how do you calculate how much it really costs amd or intel to make a cpu?
how do you calculate how much they have to sell their cpus for to get even or make a profit after all bills are paid? you cant... you dont know how many chips for what asp will get sold in the next months or years...

the only thing you can sue them for is if they sell the cpus even below the direct mfging cost, ie less than 40$ or something like that.
and i havent seen any cpus from intel even close to that price point...

[Starscream]

For those that stil dotn understand it. This has nothing todo with Core CPUs but about the P2, P3 and P4 era.

@Informal.
The EU also raided the Hqs of several of the big retailers in the EU.
And its pretty much proven that the bigger retail chains had exclusive contracts with Intel for years it was pretty much impossible to find AMD based PCs in retail stores simply cause all the big chains had exclusive contracts with Intel going.
System builders that sold their PCs in those retail stores ofc didnt want to use AMD CPus cause their main outlet the retail stores had an Intel exclusive deal going on.

ofc people like us can always get our hardware we simply order online. But the masses buy their PCs in retail stores and for years they only sold Intel.
ofc exclusive deals arent bad thing per se but it does suck if you have entire regions were you cant get a certain product simply cause all stores got the same crappy exclusive deal.

Btw the EU isnt only sue happy vs big forgeign companys.
I know it looks that way to many people in the US but the EU also hands out plenty of fines and warnings to EU based companys.
Its just that usualy those EU based companys act on the warning and correct the problem or when they are fined the news doesnt reach the US.

[Ubermann]

Who cares if AMD had gained more marketshare ?
They still would have lost it all to Intel cuz AMD was sleeping and was taking all your money and thought they had won the battle for ever.

[WeStSiDePLaYa]

pretty low blow.

and where are these 266$ USD chips? The lowtest ive seen lately is around the 280 mark...has been this way for a few months now.

this suit is frivolous

It isn't a lawsuit.

Maybe if you read the article.

Good to know you like to publicly display your ignorance though.

[ethernal]

It isn't a lawsuit.

Maybe if you read the article.

Good to know you like to publicly display your ignorance though.

Since you're being pedantic, I'm going to be too!

Technically, a case brought by the European Commission against a corporation takes the realm of a civil case. In the United States, almost all anti-trust cases are civil, although the Justice Department does have the power to file criminal charges as it sees fit.

When dealing with an anti-trust case, the government takes the roll of the plaintiff and the corporation the defendant. While this structure is less defined in the EU proceedings when compared to the US corollary, it still exists. Since a lawsuit is simply defined as legal actions in a civil court in search of remedies, the definition of a lawsuit is effectively met.

Since a hearing has already been planned (March 11/12th in Brussels), it is fair to say that a lawsuit has been brought against Intel, as a hearing is part of the litigation process.

Maybe you could have provided something useful to the thread, rather than just insult someone and spew out your own factually incorrect bits and pieces? I'm not saying that the person you quoted provided a useful or insightful addition to the thread, but at least he didn't decide to publicly insult someone for pretty much no reason.

[xlink]

Ah, my mistake, then. It's not an AMD lawsuit, but AMD is the responsible party for putting it in action. The point is...what's the point?

it stalls intel slowing their progress
AMD stands to gain $$$

[Donnie27]

There's computers in North Korea!?

and a hearty hehehehe!

[Donnie27]

@ethernal

Simply, thank you for both posts! Some folks here enjoy being rude.

The EU and the Germans have more at stake with AMD in Dresden than Intel in Ireland where folks are flocking to for Jobs.

[duploxxx]

Before Hector came AMD had A64 which owned P4 chips and even after years of having a superior CPU AMD made little to no progress in x86 market share.

So your comment is unjustified. The only reason why companies are making even smallest efforts with K10 CPU's is because Intel is now under review and they can not afford to do deals like they did before.

no its because there are still huge demands for AMD procs in OEM sales, server wise AMD is able to maintain its market share even without quadcore, @ mobile sales it is still gaining market share and desktop sales its only gaming market and oc market that chooses intel rather then AMD, I can assure you that all OEM's are waiting on proper launch of K10 and have several systems @ each range for K10 support ready and even new systems yes even dell. Not because of intel lawsuits but because of demand for AMD. ALL IO applications, non multicore scaling, VM based aplpications are still better of with AMD based systems even if they don't have quad core, why you think intel is going towards nehalem???? And this gap will even increase when k10 is launched, who cares if there is a 3.0GHZ on server proc it is too expensive against a 2.4 version price/performance, these lower versions are even pushed by oem as major sales cpu so you will have an additional price reduction.

[Machinus]

no its because there are still huge demands for AMD procs in OEM sales, server wise AMD is able to maintain its market share even without quadcore, @ mobile sales it is still gaining market share and desktop sales its only gaming market and oc market that chooses intel rather then AMD, I can assure you that all OEM's are waiting on proper launch of K10 and have several systems @ each range for K10 support ready and even new systems yes even dell. Not because of intel lawsuits but because of demand for AMD. ALL IO applications, non multicore scaling, VM based aplpications are still better of with AMD based systems even if they don't have quad core, why you think intel is going towards nehalem???? And this gap will even increase when k10 is launched, who cares if there is a 3.0GHZ on server proc it is too expensive against a 2.4 version price/performance, these lower versions are even pushed by oem as major sales cpu so you will have an additional price reduction.

Have you ever even used a core 2 chip?

[keiths]

Intel's chips are overpriced, not under.

[Syn.]

no its because there are still huge demands for AMD procs in OEM sales, server wise AMD is able to maintain its market share even without quadcore, @ mobile sales it is still gaining market share and desktop sales its only gaming market and oc market that chooses intel rather then AMD, I can assure you that all OEM's are waiting on proper launch of K10 and have several systems @ each range for K10 support ready and even new systems yes even dell. Not because of intel lawsuits but because of demand for AMD. ALL IO applications, non multicore scaling, VM based aplpications are still better of with AMD based systems even if they don't have quad core, why you think intel is going towards nehalem???? And this gap will even increase when k10 is launched, who cares if there is a 3.0GHZ on server proc it is too expensive against a 2.4 version price/performance, these lower versions are even pushed by oem as major sales cpu so you will have an additional price reduction.

Hence the reason why i said "smallest efforts".