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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 238.23+2.8%12:02 PM EST
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To: eracer who wrote (196766)5/15/2006 8:03:56 AM
From: niceguy767Read Replies (1) of 275872
 
"Intel is, and will be, attacking on performance/price ratio far more aggressively than they have in the past. That puts AMD at risk of losing consumer market share faster than they can gain business market share."

Bogus. AMD's enterprise growth has just begun to accelerate and new products offered by AMD in this segmant are likely to "hit HUGELY" INTC's hitherto peachy margins in this space.

INTC's gross profit margin is likely to fall below 50% in Q2 as a result of AMD's relentless assault over the past 3 years and now that AMD is serious about competing in the enterprise mobile and desktop space, may well have a rough road ahead in recapturing 60% plus in the years ahead, 60% that was a given in INTC's financial planning model before AMD's Opteron.

As Hans has mentioned, AMD's 65nm offerings are likely 65% of the size INTC's, meaning that production costs are less (and God help INTC if AMD yields are higher than INTC's) the likelihood of INTC regaining 60% gross profit margins in the near term is highly unlikely.

Methinks INTC is in for tough sledding for a very long while. Adjusting to competition and lower margins as a result of AMD competition in the enterprise sector just isn't going to be quite as easy for INTC as you seem to portray.
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