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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (126318)10/17/2000 5:44:13 PM
From: TimF  Read Replies (1) of 1580442
 
I'm saying that we have two companies with very healthy gross margins. I'm saying that if the companies get stupid, by setting a new, much lower price point for high end processors, that the industry could take years to recover, if at all. I'm saying that in a real price war, my AMD stock will go to single digits and my Intel stock won't be too far off.

If they price the chips at such a low level that they cannot make solid profits on them then this is true, but they are not that low yet.

AMD had to come out with lower prices. Its expanding capacity and it doesn't have business SKUs, high end laptops, server sales, or anything from Dell. To say that it is stupid for AMD to lower prices is basically saying it was stupid for AMD to ever try to grow or gain market share from Intel and that it should have settled for being a minor
player in the industry. Intel doesn't really need to slash its prices right now (although that may change at least of PIII and Celeron prices), because AMD can't produce more then a fraction of what the market is demanding. Intel may decide to fight viscously AMD's expansion of market share and if it does then we might see both companies profits and margins take a dive. Alternatively Intel could price to maximize profit and give up a bit of market share.

Tim
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