"STOCKING DOWN"
Thread, Check this article out.. IMHO, one worthy of discussion on here.. gives out a typical hardware person's view on AMD/INTEL and the stock market in general perfectly.
Snippet below.
----------
"Here's a couple actual quotes from one of the analysts who
triggered the latest decline:
'We believe AMD has already engaged in a price war.'
Well, no sh***in', Sherlock. That's up there with saying "We believe the Japanese have attacked Pearl Harbor" in 1942. Still clueless as to why they did it and what it means, though.
'It appears that AMD has engaged in a price war, where it is essentially bidding against itself," wrote Galvin, noting that Intel has yet to ship large numbers of chips at those speeds.
How dare they ship chips faster than Intel and price them lower?
How dare they confuse people who came in to buy a 1Ghz chip with something else?
When Price-Cutting Is Not A Sign of Desperation
If you have excessive inventory, you cut prices to try and get rid of them. If you have a fairly stable level of production, that's usually bad business news.
That's not the situation with AMD. AMD is doubling Duron/TBird production this quarter: to 7.2 million chips. Add in a couple million K6-2s, and you're looking at AMD to go from 7 to 9 million chips produced, an increase of about 30% from the previous quarter. Duron/TBird production alone this quarter will be greater than any previous AMD sales quarter. About forty percent of this new Duron/Athlon production replaces low-margin K6-2 sales. The rest represents increased sales.
This is expansion, not desperation. AMD is bound to make more money than before, no matter what they charge. Maybe not a stunning increase in profit, but they certainly won't be worse off. Their profit margins may go down, but so what? You can make money stacking 'em high and selling 'em cheap. The damn things only cost $30-40 to make; not like they're losing money when they sell a TBird for $120 or $150 or $250. Especially when you're used to getting $50 from most of your chips."
overclockers.com |
