Intel Trumps AMD with a New Server Chip
The chip array not only offers more power but, according to the company, uses less energy than an earlier version. The industry has expected a similar chipset from Intel's smaller rival AMD (AMD), but Intel was faster on the draw.
The launch is evidence that Intel continues to use its huge R&D budget to best AMD, whose viability has been called into question because of its debt load. Last November, Intel agreed to pay AMD $1.25 billion to cover global antitrust litigation between the two companies. That helped give AMD the capital it needed to shore up its balance sheet. Intel still faces monopoly charges by the European Commission and N.Y. State Attorney General Andrew Cuomo.
It's too early to say how these cases might be resolved. But for the time being, size still trumps legal problems. Intel's sales last year were $35 billion, and its operating income was $5.7 billion. The company has over $14 billion in cash on its balance sheet, so its ability to spend on research is extraordinary.
AMD had $5.4 billion in sales last year and net income of $644 million. Without the Intel payment, AMD would have lost money. And AMD still has a debt load of $4.2 billion. Intel will have to lose a lot more legal decisions before its ability to outspend AMD is compromised.