Dan,
Have you noticed that AMD only makes money in times of excess processor demand? That is, they profit when Intel undercalls the end demand for processors and OEMs turn to AMD to fill demand that Intel can't.
Conversely, they have tended to lose large amounts of money in times of excess supply. Given the large capital investment by Intel this year and the soft demand environment, I'd say it may be some time before a truly constrained environment in aggregate returns. Granted, Intel suffers too, but Intel has more wherewithal to endure the cycle.
Who cares how many CPUs AMD can build? How many can they sell? They have frequently been able to build more than they could sell. 486, K5, K6, K7...... We've been here before.
re:"Total processor demand this year looks like it's coming in around 140 million parts. If it goes up by 15% (an estimate that's looking more and more optimistic each day), Intel will need to supply 115 million processors (to support a total demand of 165 million)."
Gee, that's nice of you to let Intel get the remainder after AMD has sold out its capacity. I think Transmeta can build a few million parts too - should that come out of the Intel number? Cyrix stuff is still kicking around in Via somewhere isn't it - do they get any of Intel's portion? You can probably follow this logic to Intel not selling much of anything except Flash next year. Oooops, I guess we have to let AMD get their fill first in that market too since they have capacity....
regards,
jh |
