I don't think variable unit costs at the fabs matter an enormous amount (unless they are unusually high). Maybe Intel's cost in this area are lower than AMD's, maybe not, either way I don't think its more than a minor issue.
If your talking about fixed costs from the new fab, a lot of the cost is already spent, and in terms of accounting it gets figured over the life of the fab not the next few quarters.
Either way I don't see any reason to foresee a large per unit cost increase from AMD.
And the only way for AMD to preserve its current 20% market share is to match Intel's price reductions, and therefor accept lower margin.
Intel's ASPs are currently higher than AMDs. Unless Intel cuts their price by a lot they will probably still be higher. If Intel does slash prices then Intel slashes profits, maybe even loses money, unless the price cuts are in limited segments. Price cuts in certain areas used to work very well for Intel vs. AMD because AMD used to not have the high end chips, and most esp. the server chips to compete with Intel. Now AMD competes across the board so Intel can't hurt AMD with price cuts without hurting itself.
Maybe Intel's marginal costs per chip will go down, but not enough to make up for any real slashing of chip prices.
>> I'm not claiming that they do have poor utilization or yield
Well, that assumption is at the base of many people's conclusion that AMD's rise corresponds to Intel's decline... I'm surprised you disassociated your conclusion
I'm not saying I believe it isn't true either, just that I don't have enough information to tell one way or the other.
At least in server chips the relative change between AMD and Intel has a lot to do with AMD's chips being very competitive. Neither AMD or Intel will have two much problem producing enough server chips for the market (unless they underestimate demand but than its only a short term problem). This part isn't a production issue but an issue of how well the chips and their infrastructure compete against each other. Not only does AMD have the upper hand here at the moment, but I think they have proven themselves enough that if some time in the future they where at an equal level with Intel, AMD's share in server chips wouldn't return to its former negligible level. That last bit I think is a relatively permanent change. In the past AMD chips just didn't get a lot of consideration for servers. |
