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Politics : Formerly About Advanced Micro Devices
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To: Goutam who wrote (78765)11/5/1999 2:19:00 PM
From: Charles R  Read Replies (1) of 1574854
 
Goutama,

<K6-3 400 MHz shortage -

We can pretty much conclude that there is a tight supply of k6-3 400 MHz uP in the channel, based on some reports we had come across recently, Petz's observation(Chipmerachant), and price increase at Pricewatch. My question to you is, what would be the logical reasons behind this shortage? >

My take is that this is due to couple of key reasons:

- Strong demand patterns that began in early Q3 are still continuing. (Only data point to the contrary is that Niles is expecting business shipments to take a Y2K hit sometime this quarter. No other analyst to my knowledge has said this. Niles is definitely out on a limb on this one but the guy's track record makes him tough to ignore.)

- Intel is rumored to be hardballing OEMs on low-end chip supplies. i.e., if a OEM asks for low-end product Intel is saying they are out of product and suggesting the OEMs move up to the higher ASP parts. Some OEMs move and some go to AMD for alternatives. You can see the results of this in the form of increased K6 line of products from various OEMs (laptops and desktops). This is what I keep talking about when I say Intel is ceding the low-end business.

As far as the K6-3 specifics are concerned, one possibility is that some of the K6-2 builds are going toward K6-3 because of shortages in SRAMs. I am not on top of spot market prices but I think it may be more economical to build a K6-3 motherboard than K6-2 with 256k or 512K of L2 cache. In otherwords, K6-3 is finally priced to move. Looking back at Q1/Q2/Q3, K6-3 was not priced to move when it was priced to compete with PIII - given the speed grade lag and lack of competitive FPU.

There may be other reasons but I think these are the big ones.

Chuck
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