Re: - Intel confirms 12 December price cuts...
So, what if Intel does go for a nuclear strike?
The sub 700 parts are already off to the gulag, I would guess (to use a REGISTER expression). The big question is, how far will the 700, 750, and higher speed Coppermine prices be cut? Intel has undoubtedly been pushing thousands of wafers through their FABs that will be showing up just in time for the traditional January sales slump. What if Barrett's really angry?
Intel needs at least $6 Billion in real revenue in Q1 to look OK (which can be fudged up to $7 Billion with capital gains and other accounting sleight of hand).
If ASPs on 30M CPUs (cut prices far enough, and Q1 will become a pretty respectable unit sales quarter) go from 215 to 150, I would expect them to miss that by a about $1.5 Billion, and actually make a small loss.
If Intel is selling 750MHZ coppermines at $200, can AMD survive?
I think so - AMD has been coming pretty close to making it with ASPs around $70. Since the Athlon looks to be capable of running head to head with Coppermine, AMD ASPs should still be up around $150 in such a sceanario, at which point AMD is having a wonderful year and making unprecedented profits.
So I would guess (hope?) that the chances of Intel going kamikaze are pretty small. But with 4 .18 FABs and a die size of around 100mm2, it's a matter of an unlikely decision, not an impossibility - if they want to crank out 30 million 700MHZ + coppermines in Q1 and price them low enough to sell that many, they can.
They beauty of it is, AMD would still be making money.
Regards,
Dan |
