jcholewa:
I can't agree with you on your "lack of demand" hypothesis...AMD has shipped all it could produce for the past 3 quarters (i.e. 5 to 7 million processors per quarter with Q1 and Q2 being seasonally soft quarters compared to Q3 and Q4)...and, more importantly during those quarters have increased the higher margined Athys in the mix from 800,000 in Q4 to 1.2 million in Q1 to 1.8 million in Q2...Looking at Q2 ASP, one might conclude that of the 1.8 million Athys, the lower MHz Athys (i.e 600 to 700 MHz Athys were the big sellers...If the foregoing scenario is close to reality, and AMD is now capable of flooding the market with top end Athys (i.e. 1 gig), now, when INTC is experiencing production difficulties over 700 MHz and hence is virtually non-competitive in the top-end, it certainly makes a great deal of sense to make every effort to shift the weighting from low end Athys to the top end Athys in their microprocessor mix...What better way to encourage such a shift than a significant price drop, particularly when the results, if successful, are fabulous margins, little competition and perhaps a redefined entry point at 1 gig by the end of Q4!!! Just don't think the competition has any chance of keeping pace over the next 6 months...What I am saying is the recent price cuts by AMD are designed to create a demand bubble at 1 gig, which only AMD can fill at this time...Brilliant strategy, I'd say!!! |
