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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Scumbria who wrote (63713)	6/29/1999 1:16:00 PM
From: Charles R	Read Replies (1) \| Respond to of 1577079

Scumbria, I am more in sync with you and Paul than Kash on this one but still am not quite sure what this could mean going forward. If this deal gets done, CPU biz might not be the place for investments for a long term player. VIA/TSMC is a killer combination if they can get out socket370 part with the Jalapino core. TSMC, in addition to having state-of-the-art process, may also have the lowest cost structure in the industry today. In addition, there is plenty of cheap assembly capacity in the far-east. Folks like Intel/AMD pay a premium on assembly because they prefer solid suppliers instead of focussing on the price-de-jour but Taiwanese are experts at exploiting every small price move in the market. And, if you pump enough chips out there ASPs will collapse - first low-end and then high-end. Look at what 3Mu CYRX parts did this Q. VIA/TSMC are not stuck with fab depreciation issues like AMD or Intel. They can incrementally ride on the excess capacity. That is a pretty powerful dynamic. All else being equal (I am not saying they are but just assume), low ASPs favor the low cost competitor. If I were Intel, I would definitely take this business off the street - couple of hundred million dollars is chump change and probably as good an insurance as one can get. Chuck

To: Scumbria who wrote (63713)	6/29/1999 1:20:00 PM
From: Ali Chen	Read Replies (3) \| Respond to of 1577079

Scumbria, <shifting all of their capacity to high margin K7> Do you guys ever read AMD officials? This is not what AMD is planning for: www1.amd.com This is the only reasonable way to compete by creating pressure on all market segments. I think K6-III on 0.18Cu could be VERY competitive against all Celerons. If AMD would leave the low-end segment, Intel would immediately flood it with Celerons-370, rise prices and make the sector profitable again. This would allow them to drop prices on P-III - X-III, and AMD will be in trouble again.