From Travesty To Tragedy . . .

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As we reported yesterday, no more socket 939 Opterons

None. Not just the cheap ones. All of them, within just a few months of their inception.

Why?

Well, maybe the proper question is not, “Why did they die?” but rather “Why were they ever born?”

Why make a CPU that inherently competed against another one of your own product lines? I suppose I could see that for marketing reasons (i.e. get more money from those who think an “Opteron” workstation would be better than an “Athlon 64” workstation, but then why price your premium brand for less than the mainstream version?

Did AMD just make too many Opteron-type CPUs, decided to clear them out, then found out they had cleared them out all too well?

Or was this just a turf fight between A64 sales and Opteron sales?

Does this imply that new sockets are coming sooner than expected? But if that’s the case, why didn’t they stop making socket 940 chips? Or did they do so last quarter and not tell anybody?

Whatever the answer really is, we can be sure of two things. The first is that, outside of a possible figleaf which will make no sense, AMD will say, “It’s none of your business.”

The second is that in any lawsuit, the Intel lawyers will gleefully point to this and say, “Look at these buffoons! This is the gang that couldn’t shoot straight!”

Yes, it is a tragedy that the Grinch took away Christmas from some hundreds or thousands of children and children plus, and most of them won’t forget it for a long, long time, but let’s face it, with all the real misery in the world, it’s tragedy spelled with a tiny, tiny “t”.

The real tragedy will be its effect on AMD. This is a public relations disaster (granted, small scale); you simply can’t spin this out of being an act of incompetency, one way or the other.

And AMD not only screwed up; it does not appear they’ve even noticed that they may have given their customers more than a bit of a raw deal by doing what they did, and more importantly, saying nothing about it. After all, they still haven’t said they’re stopping production publicly, all this is based on a leaked document.

Let’s assume for argument’s sake that the theory going around that AMD is “stocking up for Dell” ends up being true. Just how well do you think, “You can go to hell, we’re supplying Dell” is going to fly among all those who have loyally backed AMD through some bad times the last few years?

What I fear is that in Hector Ruiz’s head, there is no downside to doing that.

After years of hearing and reading the man, I think that to him, a “customer” is an OEM or a Fortune 500 client. Everyone else is fluff. After all, that’s all he had to deal with at Motorola.

One should also keep in mind that while Mr. Ruiz was head of Motorola, the company basically went nowhere with the G3 processor, which eventually forced Apple to switch to IBM as its main supplier, and eventually Intel. The CPU division of Motorola eventually got spun off because it had become an albatross to the rest of the company. Mr. Ruiz went to AMD before things got bad, but there’s little indication he’s learned from the experience.

For instance, just what is AMD doing for post-Hammer development? What post-Hammer development?

Not An Event, An Indicator

This whole travesty in-and-of-itself is admittedly small beans in the great scheme of things, though those looking for the bean and finding out it had turned into the CPU version of “Where’s Waldo” might think differently.

However, it is important as an indicator of how the “new AMD” operates. There’s an attitude, an arrogance, a hubris here that at least was rather less intense during the Jerry Sanders era.

Right now, what’s probably happening at AMD is that their production capacity is reaching its limits. They sold significantly more processors last quarter (somewhere a bit over 9.5 million) than ever before, and the demands for the Christmas quarter are even greater.

The problem is, Dresden I probably can’t make much more than 10 million a quarter, and any real contribution from the new fab is probably at least six months away.

Last quarter, during the quarterly conference call, one analyst asked just this question, and got back a rather tentative “No.”

Given what has occurred since then, with CPUs vanishing and distributors being put on allocation, the answer now is likely “Yes.”

How you react to a problem can be as important as the problem itself, and this is where AMD falls down all the time. A little openness and honesty goes a long way. When Intel has supply problems, they do mention them, and say “things are going to be tight for a while.” When Intel plans to pull a processor, they release a publicly available document saying, “Hey, we’re going to pull the processor.”

It’s obviously hasn’t hurt Intel too much over the years.

Why can’t AMD do that? If nothing else, it will let customers know when they might be going on a wild goose chase and let them decide whether or not they want to do that with eyes wide open.

That’s a lot better than wasting your customers’ time.

AMD is going to have to learn that if it doesn’t respect its customers, all its customers, it will lose them.

Now “respect” doesn’t mean “do whatever anybody wants.” The problem here isn’t AMD deciding not to make certain Opterons anymore. The problem is not telling anybody publicly about it, and making a lot of people and businesses waste a lot of time.

This has been a dis, and they should be ashamed of it.

Ed

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