"AMD stock problem is, and will stay for a few months, that institutions have started dumping their AMD shares. Worse, the factors that caused the down-turn in sentiment will continue for at least a year. Worse still, they'll intensify."
That'a a load of BS. The entire tech market has taken a hit and its been basically indiscriminating to this point and probably stems in large measure from the "very serious concerns" around INTC's now obsolete P4's that are now being exposed. I suspect that INTC's problems are much more significant than INTC would care to let out as, based upon INTC's panic P4 price cuts, I'd guess that demand for P4's has been falling off at an alarming accelerated rate. I'm not even convinced that a 60% P4 across the board price cut will stem the customer erosion now taking place. As BUGGI alluded to earlier, AMD's profit margins were above 55% in in Q1 while INTC's were falling rapidly and looking to fall through 50% in Q2 down from 60% margins enjoyed by INTC pre-Opteron. Consequently, INTC is in a real pickle now, and running their catastrophic P4 price cuts under the euphemistic banner of reclaiming marketshare. I'm seriously wondering if INTC's profit margins will remain above 40% in Q3, if not Q2!
The real conundrum for INTC is that they need to keep producing these obsolete P4's until such time as INTC can get Conroe production up to snuff, perhaps about a very long, for INTC anyway, year from now.
"Yes, AMD can gain market share. But only at the cost of dropping ASP and reversing profit growth."
I wouldn't bet on it, at least on declining Revshare as opposed to unit share, as AMD is enjoying unprecednted demand for its servers which will add about $100M per quarter in Q3 and Q4. Add to that the migration to X2's resulting in large proportionate increase in AMD's mix, and AMD may well see $1.5B in Q3 revenues and $1.7B in Q4 revenues.
No, no, no, it isn't AMD who has the "frightening" problem of vast obsolete units sitting in its inventory. It is INTC who has found the need to drop P4 prices by 60% in order to unload its obsolete P4 inventory, not AMD.
Oh, by the way, is INTC having a problem getting Conroe out to market. Production glitches bigger than all the money they've thrown at it? I heard we won't see Conroe 'til September now. Couldn't be true though as Doug seems to think that the Conroe ramp is a piece of cake with those ever increasing caches that suck up all that silicon real estate, even at 65nm, as they just don't shrink that much.
Gotta like the AMD co-processor solution as an alternative to ever increasing mind-numbing INTC caches as an innovative solution to future performance! (Just a matter of time before INTC copies co-processing as well...that is if they are to retain a 50% market share ;-) |
