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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 203.14-0.8%3:59 PM EST
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To: jeff_boyd___ who wrote (21946)12/8/2000 8:56:14 AM
From: Dan3Read Replies (1) of 275872
 
Re: why wouldn't they offer PIV at little or no margin just to deprive AMD of the profits?

They are already close to doing so, but consider this: Intel's raw cost on P4 is around $100 due to die size. Add in the $70 check for Rambus that is included with each CPU, and you are at a cost to Intel of $170 for each P4. AMD's cost for a thunderbird is about $30. So if Intel sells its limited production flagship at cost, pushing down the price it will be able to get for anything else it sells, AMD can sell its Tbird at a 40% discount to Intel's cost and still be $12 above its present ASP, as well as making a margin of 70% (e.g. cost $30 and sell for $102).

Regards,

Dan
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