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Politics : Formerly About Advanced Micro Devices
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To: Tenchusatsu who wrote (147949)7/5/2002 5:13:34 AM
From: AK2004  Read Replies (1) of 1577900
 
Ten
re: the 33% drop is not entirely attributable to the weak market and the pricing pressure from Intel.
on the contrary, it is very possible. amd's asps are considerably are lower than intels and so are the gms.

Example for illustration only:
original conditions:
amd's asp is $80 and intel's $150
amd's gm is 40% and intel's 60%
new conditions:
Intel drop prices by $10 and amd by $7.50
result:
loss in profit for amd: 7.5/(80*.4)=23%
loss of profit for intel: 10/(150*.6)=10%
loss of profit for amd if decline is the same: 10/(80*.4)=31%

It is oversimplified example but sufficient to illustrate the point. Revenue would be affected in similar way, just drop gm adjustment.

-Albert
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