Summary
Architectural superiority not enough anymore
Analysis
AMD had always been an also ran until they provided superior architecture to Intel and took major market share in the server segment. This superior architecture brought better performance at lower power thus enabling AMD to charge higher prices while forcing Intel to cut theirs. Intel did not take them seriously for enough years to allow AMD to pull ahead. Intel survived because of superior financial and manufacturing strength.
Intel awoke and has closed the architecture gap and its next generation processors will have on-chip memory management; this development effectively wipes out the entire AMD architectural advantage. When Intel combines this with their new 45 nM Hafnium manufacturing process they will have chips with far superior power performance ratios than AMD's. Even without the on-chip memory manager the new 45 nM products are far superior for power and performance.
In the back ground AMD is trying to integrate ATI's GPU architecture within a single device. these types of integrations can yield great performance improvements but are usually fraught with tough technical issues. AMD's track record for these types of on time deliveries is poor. and we already know Intel is working on the same type of architectures; they will never let AMD get ahead of them again.
Bottom line for me is that AMD's product family will continue to loose ground against Intel price performance wise for at least another year. AMD plans on having 45 nM parts in 2008 but they will not have the superiority of Hafnium so they will not be as efficient power wise.
Many people have criticized the ATI purchase but I understand the rational: AMD wanted to engineer another architectural leapfrog. Unfortunately they overpaid, its harder than they thought and this time Intel won't be asleep at the switch.
My customer base, who a couple of years ago only bought AMD Athlon parts won't even look at AMD this go around. You just cannot ignore Intel's power-performance advantages.
