Re: conclude that because AMD’s maximum cut was just 1% less that the Intel cut that everything is coming up roses.
Unless "roses" is your way of describing a cataclysmic price war, I am not expecting everything to come up "roses" for AMD - or Intel.
I think Intel's $20 Billion in new FAB costs over 3 years has put in place capacity to flood the market with P4's - especially since market growth looks like it will only be moderate, near term.
Meanwhile, AMD has been cutting costs, and developing a profitable niche (notebooks, using the smaller, lower power Athlon core and SOI) to let it stay close to breakeven. AMD is hunkered down.
If Intel can restrain itself from dumping all those processors onto the market, desktop, workstation, and server ASPs could stay high enough for Intel to keep covering its costs - but I don't think they'll be able to restrain themselves, and AMD will be probably be willing to ship into those markets at near marginal cost (less than $50).
But, I was expecting this last quarter, maybe I'll be wrong again. Last quarter, AMD couldn't ramp Athlon XP as quickly as they hoped, and reduced shipments. Intel pushed its PIII to P4 transition a little too fast and couldn't ship enough parts to depress prices, which also reduced shipments and delayed any new price war. We'll see what happens over the next few quarters. |
