Intel drags AMD into processor sourcing issue and Monero could magnify issue

Intel has been struggling to meet the demand for processors for about a year and a half. The company has a demand well above the production capacity. Since this summer we have been hearing similar rumors from TSMC, which makes AMD Ryzen processors. The Taiwanese foundry has not confirmed this information at the moment, but it is something significant.

According to the information we have, Intel has significant problems because it cannot make the jump to 10nm. In the case of the problems of AMD and therefore of TSMC, they would be for two reasons: more sales than expected and more commitments. TSMC makes other chips in the 7nm lithography and AMD is selling more Ryzen 3000 and Radeon Navi than originally planned.

NVIDIA is saved ... for now

Currently the only giant in the hardware world without problems is NVIDIA. The company also works with TSMC, but has in its favor that its GPUs are based on 12nm. This allows them to have no problems, as it is a highly polished lithograph and is relatively low in demand. As there are no excess chips under this lithograph it does not have the problems of Intel and AMD.

But this iconic situation is only temporary. Everything points to NVIDIA launching GPUs with Ampere architecture based on 2020nm in 7. These graphics chips were initially to be produced by the Taiwanese foundry. In the summer we saw the rumor that it would be Samsung who would manufacture the new graphics chips. A few weeks ago TSMC was discussed again.

HiSilicon (Huawei), Apple and AMD have TSMC's 7nm lithography saturated. The Taiwanese company in 2020 should already have the 7nm EUV (7nm +) lithography ready and produce chips under this node. This will possibly fix the current problem and there should be no problem producing solutions for NVIDIA.

We will see if it is finally TSMC or it is Samsung who makes the NVIDIA graphics chips. What is clear is that Jen-Hsun Huang (CEO of NVIDIA) does not want to suffer the same problems of Bob Swan (CEO of Intel) and Lisa Su (CEO of AMD)

Is there a common link?

Something that we have detected is that the analysis is being done in proximity, not in the environment. Sure you have been checked, but calm, let me explain. Intel's problems with 14nm lithography and its problems jumping to 10nm are discussed. There is also talk of TSMC saturation to meet AMD's demand for processors. These are two problems that, seen individually, do not allow a correct photograph to be taken.

Dell is key to truly understanding the problem. It's the world's largest OEM and has had to revise its revenue forecast due to Intel's issues. Rumors suggest they're in talks with AMD to equip their systems with Ryzen processors. So far, nothing sounds bad. However, if AMD sells more than expected and Intel can't meet the demand, and Dell shifts the problem to AMD, doesn't the problem simply change sides?

Well indeed, the problem only changes color. The thing seems to be in an increase in the demand for processors worldwide. If we add the three factors, it is clear that there is a brutal demand for processors around the world and none of the assemblers is able to satisfy the demand.

The problem above all is that we see it in the user code, in gaming chips, for desktop, but the world does not end in Finisterre. We must understand that artificial intelligence, supercomputing, servers for games, for web applications, etc., are based on processors. These processors can be Intel Xeon or AMD EPYC, therefore when we talk about lithography production problems, we do not talk about this or that processor, we talk about everything in general.

Intel poor planning as the source of the problem?

This is like placing dominoes and pushing one, they all fall. The source of the problem seems to be clear: Intel. His obvious poor planning, indicated by Bob Swan, with the 10nm lithography seems to drag the industry down. AMD has come across something positive and a problem.

Intel's troubles are causing AMD to sell processors easily. The Ryzen 2000s were good, but the Ryzen 3000s are a major upgrade and their performance is brutal. You just have to see that the 9-core Ryzen 3900 16X is better than the 9-core Intel Core i10980-18XE. But this increase in sales is already beginning to be a problem and blessed problem for the company, everything is said.

But we extrapolate this to the supercomputing market, where EPYC gain popularity against Xeon. Many assemblers who only worked with Intel have started to switch to processors from AMD. It is estimated that this year AMD will go from barely having a presence in the server market to having 10% of the market, therefore Intel will go to 90%.

It may seem like a ridiculous figure of 10%, but we are talking about thousands of EPYC processors. It is not a number of a few tens or hundreds, we could speak of several thousand or tens of processors. Not counting the Threadripper, which have more and more presence in the Workstation market.

The Intel problem indirectly affects AMD positively and negatively.

An Uncertain Future

Some may not be aware of the Monero (XMR) cryptocurrency change in their algorithm, but it is notable. This week they made a change to the algorithm that means you cannot mine with ASIC or GPU, only with CPU. It may seem like irrelevant data, but if Bitcoin skyrockets (as some say) in the coming months, be careful. Be careful because if XMR becomes profitable for mining with a processor, it will sell in the hundreds.

Of course, there is no crystal ball, but the graphics card crisis of 2017 might be a joke in comparison. So AMD and NVIDIA had scope to increase their GPU demands to GlobalFoundries and TSMC, respectively. Intel and AMD now don't have that capability, not by chance.

We would see how Intel would see its problem multiplied by 10 times, at least, but AMD will not be far behind. TSMC does not have the capacity to double or triple the production of processors under 7nm for AMD. Be careful because things could get much worse.

Yes, it is a forward-looking hypothesis, but it is not as far-fetched as anyone might think. In 2020 there will be a major economic recession and there is the Halving of Bitcoin in March (approximately). It will move the block reward from 12.5 BTC to 6.25 BTC and with the current price it will not be profitable to mine it. So if Bitcoin does not rise in price, it will be a major problem and if it rises, it will drag down the rest of cryptocurrencies, including Monero.

Conclusion

The processor market has a major problem because of Intel and it extends to AMD and who knows who else it will end up affecting. But even if the timing is bad, it can make the situation quite worse. While it is somewhat hypothetical, we should not rule it out at all by the cryptocurrency factor.

Without this last factor, the thing happens for Intel to launch 10nm processors at once or find some improvised solution. Six more months to patch the problem is more than not enough. The solution goes through 10nm very urgently and having your 7nm lithography ready, leaving only 10nm for a year.

As long as Intel's problem persists, AMD cannot be entirely calm. What is an excellent time for the company can turn into a difficult time. Perhaps this is why AMD continues to produce Zen + @ 12nm processors (Ryzen 2000), some processors that seem to be far from being discontinued.

Can we be better? Yes, as soon as Intel releases 10nm processors. Can we be worse? Yes, if Bitcoin rises strongly and remains above $ 12.000.