Re: Dell still is unable to get enough high-end supply from Intel...
If Dell came on board near term, we'd all have to do some recalculation.
There have been some rumors that yields on Athlon were north of 50%. Sanders has said that at .18 they get 300 die off a wafer so the math for Q1 could be as high as:
13 weeks x 50% yield x 50% of wafer starts x 300 die/wafer x 5,000 wafers/week = 4.9 million Athlons in Q1.
I don't think the market is ready for that many yet - so more of the starts would be K6-X, but Dell can certainly be accomadated. We've seen supposed estimates from VIA for 14 million and 18 million Athlon chipsets next year. AMD will probably still ship 1 million plus chipsets per quarter so chipsets shouldn't be a problem.
Which seems to beg the question, what if Intel goes all out to stop this?
If Intel decides to commit ASP suicide by cutting prices to one third of present prices, AMD should still be able to make a little money (even with Dresden ramping they can get by with a Billion a quarter, and flash, com, etc will be giving them almost half of that) and Intel would be making multi-billion dollar losses. AMD could keep soldiering on with an Athlon ASP in Q1 of $100. If Intel Pentium III ASPs came down to $120, Intel's losses for the quarter would certainly exceed $1 Billion, possibly approaching $2 Billion. (Don't forget that if unit prices decrease by 2/3, the proportion of high end parts demanded by the market would go up, so I'd expect a less than 2/3 reduction for ASPs)
I think there are some at Intel who would like to follow such a strategy to keep AMD off of their backs, but much of Intel's focus is now on Internet service and infrastructure technologies. Intel needs plenty of capital to move into these areas, so there will be much resistance to an extremely expensive price war at this point. Since AMD has signaled through the offering for sale of its com division that it will not challenge Intel in the area that Intel has pointed to as its primary target for future growth, Intel may feel that its resources are better spent expanding into new areas than trying to starve its competition.
Any of this make sense? Or have I been eating too much turkey?
Regards,
Dan |
