Why Are There Only Two CPU Companies?

Why Are There Only Two CPU Companies?
4 min read
18 January 2021

Life is great when you have lots of choices. I mean who hasn't had a little party in their head when getting off at a highway exit and seeing two dozen fast food places vying for your attention. But this isn't the case in the CPU world where you basically only have two choices on desktop, AMD or Intel. So how did this happen?

I mean, with as many computers as there are in the world, no other companies want a piece of the action? To understand why there are only two CPU options for your PC, we have to go back to the first PC, the original IBM personal computer from 1981. Why Are There Only Two CPU Companies?IBM chose the Intel 8088 CPU, to power the machine, which was based on the x86 instruction set. Why Are There Only Two CPU Companies?This ended up being an enormously consequential choice as the IBM PC exploded in popularity, and pushed lots of its competitors out of the market because it was a versatile, well-built computer, that offered great value for money, at the same time.

This meant that software developers wanted to write programs for the IBM PC and compatibles, that utilized x86 CPUs. Meaning Intel quickly became a very powerful name in the microcomputer CPU space. So powerful in fact, that they ended up licensing out the x86 architecture to other companies in order to keep up with demand, without having to manufacture x86 chips completely on their own, but still make money. Why Are There Only Two CPU Companies?Ironically, AMD was one of these licensee companies and although Intel and AMD obviously remain rivals to this day, AMD still has an x86 license, which it's used at various times, to beat Intel at its own game.

Obviously, their rise in lineup is the one currently giving Intel fits but this was also true back in the 1990s, when AMD started improving upon the x86 design, and competing directly with team blue, rather than just being Intel's second source chip supplier.

Although AMD wasn't the only x86 licensee that tried to make inroads into the market, they did have the knowledge and resources to become a serious contender, as they were already a publicly traded company that had multiple chip fabs.

Other firms that had access to the x86 architecture, simply didn't compete all that well. One notable example is Cyrix, who tried to go toe to toe with Intel's new Pentium lineup in the mid 1990s.Why Are There Only Two CPU Companies? Cyrix promised big time performance but their chips rarely delivered. And they made an infamous mistake, when they decided to focus on integer performance, to compete with the Pentium.

At the time, Cyrix thought that the trend of most desktop programs using mostly integer-based processing would continue. But what actually happened is that the low cost but powerful Pentium, became so popular, developers instead coded for it's floating point unit.Why Are There Only Two CPU Companies?So Cyrix's challenge, didn't last very long. And other potential competitors were typically late to the game, compared to what teams red and blue were offering.

Think about how Apple switched from PowerPC to Intel partly because Intel chips, were simply more powerful per watt. And of course the next major innovation in desktop CPU's 64-bit processing, was developed by none other than AMD, who subsequently cross-licensed that technology to Intel, paving the way for the modern era of x86-64 computing, employed by virtually all modern PCs, and making it even harder, for smaller chipmakers to get a foothold, in time to be relevant.

Of course, because most of these issues revolve around the x86 architecture, chipmakers who have focused on other instruction sets, have done quite well. Qualcomm, you might've heard of them for example, is a huge force in the mobile space with its ARM-based chips. And Apple has made headlines recently for releasing its NaN x86 M1 processor, which offers very impressive performance for Mac users. But if you're a PC loyalist, I wouldn't expect the duopoly to disappear anytime soon. But don't worry, at least this red versus blue fight, shouldn't involve politics, or frag grenades.

Alex 10.6K
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