I don't buy this story at all, mainly because AMD never could fight Intel in a straight up fight. AMD is at least an order of magnitude a smaller company than Intel, so much so that Intel spent more money on R&D (http://newsroom.intel.com/community/intel_newsroom/blog/2011...) than AMD makes in total revenue (http://phx.corporate-ir.net/phoenix.zhtml?c=74093&p=irol...) last year.

That isn't even about monopolistic business practices, decisions, or market forces. You are comparing two companies operating on effectively different planes of existence. Intel owns the instruction set, has the most advanced silicon fabs in the world (and still makes their chips in house) and spends more on R&D than AMD even makes. And all Intel does is make CPUs.

Meanwhile, AMD bought ATI and took a tremendous gamble on APUs. They are just starting to mature their APU line with Trinity in the last few weeks, and are still reeling from integrating two large companies together like that. They had to sell their own fabs off and couldn't even make their most recent generation of GPUs at Global Foundries because they aren't keeping up anymore. On that front, the 7000 series graphics cards (from my objective viewpoint) basically crushed Nvidia for the first time in a while. They were first to market, as a result didn't have major shortages, and price cut at the appropriate times to keep their products competitive. It took Nvidia almost half a year to have their GPU line out after AMD, and their chips, at competitive prices, are almost exclusively openGL / graphics devices, being beaten in GPGPU operations by the old 500 series and easily by the 7000 series because they tried going many core limited pipeline over more generic cores in the 500 or 7000 series that were better at arbitrary GPU compute tasks.

So they are doing really well in graphics. And their APUs are really good graphics chips too. The only flaw in AMD right now is that they are floundering on the cpu fabrication front as badly as Nvidia did with their graphics line (only with their cpus). They eat power, they are effectively 1.5 generations of fab tech behind, and the bulldozer architecture is weak in floating point and serial operations.

That doesn't ruin a company. Hopefully next year is the year they really start moving forward, because I really think AMD is the company to finally really merge gpu and cpu components into some kind of register / pipeline / alu soup that can really revolutionize the industry (imagine SIMD instruction extensions to x64 that behave like opencl parallel operations and have the normal processor cores work on register ranges and vectors like a gpu, rather than just having a discrete gpu and cpu on one die).

Even barring that kind of pipe dream, Steamroller is shaping up to be sound. It finally gets a die shrink AMD desperately needs to stay competitive, if only to 28nm, and finally puts GCN into their APU graphics instead of the 6000 series era VLIW architecture.

They can't really stand up and fight Intel head on anymore, because Intel got on the ball again, and their cpus are crushing AMD in a lot of use cases, especially power usage. But AMD still has significantly better graphics, and are leveraging it, and they are finally getting over the ATI growing pains, so I'd wager they are still in the game, if only barely. They have a lot of potential still.

Footnote: I really think market is a big reason AMD is falling behind. The Ultrabook campaign is stealing wealthy pc buyers from them, and that is where chip makers get a majority of their profits (look at the high end mobile i7 chips selling for a thousand bucks). Desktop sales are abyssmal besides OEM systems or businesses. Intel wins at getting business contracts just by size alone, they just have more reach. Desktop enthusiasts can bank on AMD being a cost effective platform, but the wow factor lies in Intel chips, even at the premium, and they steal that market too. AMD doesn't even do well in the cheap HTPC market because their chips burn so much power. They are in a crossroads where all their target markets are either becoming obsolete or they are losing ground, and not because they have bad products, but because their perceptions and influence are growing worse.

Right now, AMD is really strong in mid ranges. Mid range laptops with a trinity APU are really good and extremely cost effective (I had a friend buy an A8 based Toshiba because it was $500 cheaper than a comparable Intel machine that could run League of Legends). Piledriver is good enough in the desktop space to recommend one of the 4 or 6 core variants to friends looking for a budget PC gaming experience, because they are pretty much more than enough with a proper overclock for anything major. But AMD has (from my experience) a bad image right now as a dying company and as a maker of budget goods, even when their GPUs kick butt and their desktop CPUs can (at least according to the recent Phoronix Piledriver FX benchmark) hold ground against even Intels best Ivy Bridge offerings in some cases at almost half the price.

TLDR: I guess after graduating college I had withdrawal on writing essays. This is a really long wall of text, holy bacon.