- AMD was founded the year after Intel. As with Intel, AMD’s founders, including CEO Jerry Sanders, were alumni of Fairchild Semiconductor. While Intel’s founders came from the semiconductor pioneer’s engineering and management ranks, Sanders came from the sales department at Fairchild, where he was a top salesman. AMD eventually began selling MSI logic products, including the Am9300 shift register and the Am2501 binary/hex up/down counter. AMD had a solid, but a bit more expensive, selection of logic products. A major AMD differentiator was that it offered an enhanced military-grade reliability standard, Mil-Std-883B, for no additional cost. AMD built a number of second-source products, but during the 1980s the company transitioned to more innovative chips based on AMD research and development. AMD built one of the earliest Ethernet controllers (the Am7990) and an early 802.11b controller (before if became known as Wi-Fi). In addition, AMD built networking controllers for bleeding-edge fiber distributed data interface (FDDI), along with Ethernet switches and hubs. Other unique products included a video compressor/decompressor processor (VCEP) for image compression, a scalable 2D graphics chip (QPDM), ISDN communications chips, and programmable array logic (PAL) devices, including the ultimate PAL — the 22V10.
- The company had signed a second-source agreement for the 8086/8088 and subsequent x86 processor in support of Intel’s design win for the IBM PC. Back in those days, second-source agreements were common (as were reverse-engineered products). The rationale for having a second source was that the semiconductor manufacturing processes were still fickle and the semiconductor companies only had a single manufacturing plant. A semiconductor manufacturing plant (commonly called a “fab”) could suddenly “lose the recipe” and product yields would plummet. For IBM, to rely on a sole-source partner (Intel) was deemed too risky for the new PC product. IBM and Intel thus approached AMD to manufacture an exact copy of the Intel processors: such that, if Intel’s fab had problems, IBM could then source chips from AMD while Intel fixed the problem. As the IBM PC compatible business became more and more lucrative, Intel determined it didn’t want to share the business and designs with AMD. AMD had even produced faster 80286 and 80386 processors than Intel.
- AMD eventually built its own Am486 silicon design and gained access to the Intel 80486 microcode — though not the Pentium processor. But AMD had already embarked on an independent processor development path. The first clean-slate x86 processor by AMD was the AMD-K5. While AMD’s K5 was an engineering triumph, the chip took longer to develop than anticipated and it lagged behind the Pentium processor in clock speeds. To keep pace with Intel, AMD needed a second design team and a new CPU design. Jerry Sanders found the x86 processor and the design team the company needed in a startup named Nexgen. Sanders took a gamble by buying Nexgen and porting their next-generation design to AMD’s semiconductor process. That product became the AMD-K6 and was followed by the AMD-K6-2, with a new set of instructions for PC games called AMD-3DNow!
- The next breakthrough for AMD PC processors came with the Athlon processor (also known as K7). AMD had hired some leading engineers from the DEC Alpha microprocessor team, including future CEO, Dirk Meyer, and had also adopted a new high-performance bus from DEC, called the EV6 bus. The Athlon processor was fabricated using AMD’s advanced process technology: it included copper interconnects (instead of aluminum) for the first time in a PC processor, and it was the first PC processor to reach 1 GHz (beating out Intel’s Pentium III by a few days).
- Unfortunately, the Athlon design and the EV6 bus could only take AMD so far: it needed another breakthrough to really step up its competition with Intel. A team was assembled under Jim Keller to build a next-generation 64-bit “K8” processor that was still backward compatible with the 32-bit x86 instruction set and with a more scalable processor interconnect. The code name of the chip was SledgeHammer. Although Keller left during the design, a Nexgen engineer named Fred Weber took over the project. Under Weber, AMD developed the AMD-64 instruction set (also known as x86-64) and built the Opteron server processors and Athlon 64 PC processors. These design elements became the foundation for the x86 processors we have today. The K8 processor caught Intel by surprise. Intel’s internal politics had stopped the release of Xeon processors with 64-bit instruction extensions because the company was committed to the Itanium processor, codeveloped with HP, for its 64-bit roadmap. This proved to be a strategic error for Intel and opened a product gap for AMD’s Opteron to enter the mainstream server market as well as the high-end PC market. The K8 system architecture was more modern than Intel’s Itanium and Xeon.
- While AMD was absorbing an expensive ATi merger, Intel struck back with a new CPU design, code-named Conroe, from its Israeli design team. Conroe was 64-bit, lower power, had higher performance, and had adopted the AMD SledgeHammer-style platform design. This new competition, along with the burdensome debt it had taken on, and the recession, put AMD in a financial bind. Intel had also been able to integrate 3D graphics into its microprocessors, negating some of the Fusion APU advantage (AMD still had superior graphics). This led to AMD selling its handheld graphics group to Qualcomm and spinning off its semiconductor manufacturing plants under a new company, called GlobalFoundries, to help raise cash and to lower R&D and operating costs. Ultimately, AMD’s decision to become a fabless semiconductor company became an asset — it was able to use multiple best-in-class foundries including GlobalFoundries — which can be seen today in AMD’s ability to use TSMC’s advanced 7-nm processor for the latest graphics and forthcoming server and PC processors.
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