Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Scumbria who wrote (58781)	5/19/1999 3:17:00 PM
From: A. A. LaFountain III	Read Replies (4) of 1582916

Re: CPU prices are going to converge on $50? The point that I was trying to convey is not so much the $ level, but the speed of the descent. Which, indirectly, leads to another point that I'll try to address. It seems that many on this thread are rejecting the notion of suitable profitability for parts under $100. Yet I look at a microcontroller company such as Microchip Technology that sells parts for under $10 (and I mean under, well under) and yet generates 50% gross margins and 25% pretax margins. Now obviously 8-bit MCUs don't sport 128Mb of on-board SRAM cache, but if anyone thinks that the MPU market is getting competitive, they should take a look at the microcontroller business. So I don't believe that it should be assumed that the Celeron is some sort of loss leader, either by design or by default. I have a hunch that if that were the case, Mission College would be littered with the bodies of those responsible. - Tad LaFountain

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