And my email to Ms. Williams:
Ms Williams:
I thought your article was well done but I have some problems with a couple of the points that were made. First, the article states that Intel's costs are lower because the chips are smaller. That's not entirely true. AMD has completed its migration from 0.25 um to 0.18 um processes which result in smaller chips, producing more chips to the wafer. Meanwhile Intel is midway through its transition, meaning that it has some fabs producing at 0.25, and others at 0.18. So some of Intel's chips are, in fact, larger and not smaller than AMD's, while others are the same size.
In terms of volume, Intel may have the edge because it has more fabs but the architecture of its primary chip, the Pentium, is old and its yields have deteriorated significantly. In the meantime, AMD's yields on its newer chip architecture, the Athlon, are very good. What does all this mean? It means that Intel's historical production advantage, due to volume and chip size, has been shaved considerably by AMD in the past two years. It means considerably better margins for AMD in just two quarters. It means that AMD has a steady supply of inexpensive chips.
As for stating that consumers are more concerned with price rather than speed, I don't believe that to be correct. It certainly flies in the face of many market studies and their conclusions. If we look the problem logically, we see that computer applications continue to become more complex, requiring more and more Mhz or Ghz. Making matters worse, its not unusual for most of us to have two or more applications running simultaneously, requiring even more power. In two years, I have gone from 175 Mhz to 500 to 750, and its only a matter of time before I am up to 900 Mhz. And the software I use is hardly complex...Excel, M'soft word and internet stuff. But I need that speed just to keep up with work demands.
Furthermore, if price were the issue why is Emachines, the low cost provider of PCs, floundering so badly.....it has been rumored to be close to bankruptcy. No, Mhz/Ghz rules because people not only like speed, they need speed. And who rules the upper speed limits with little to no competition from Intel; that's right, AMD.
No one likes a chip war but AMD is not nearly the underdog that your article portrays. Remember, its the pressure from AMD that has caused most of Intel's misfires, and not a sudden attack of ineptness on Intel's part.
Please talk to some other experts besides Wall Street analysts and I think you will get a much different view of the current relationship between the two chipmakers. Talk to people from the tech magazines or chip distributors or the original equipment and component manufacturers.....you might end up writing a very different and much more compelling story......the chipmaker that comes from behind.
Sincerely, |
