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

To: DRBES who wrote (76641)	10/23/1999 7:41:00 PM
From: Bill Jackson	Respond to of 1574589

DRBES, AMD lives on due to support from the major vendors of systems who like the beneficial fallout from the competition. By the book AMD would have succumbed ere long. This support along with good work by AMD and from the Nexgen group coupled with Alpha bus have made this into a race....for a while. AMD is in the position of having a new modern fab and an excellent older fab and if they can make them yield and fill them with products(their own CPUs, Flash, and merchant goods, like game ROMs, etc)they are in a position to gradually increase their share of the pie. The die shrinks have the effect of perhaps leaving Intel with too many fabs as they may make more CPUs than there are sockets....but I suppose they can add extra cache to make them bigger to keep the numbers down. So AMD is in what is called a 'stern chase' and if the copperminus comes in fast and able it will be a match for the Athlon in most areas. It then becomes a pssng contest pricewise as Intel burns $ to kill AMD once again. Since the price cutting will be broad and across all CPU lines(yes, even the Xeons, as an Athlon counter for the Xeon is on it's way as we speak) it will be painful to both sides. There will no longer be a safe haven of high margin CPUs to make big $ on....they will all go deep into the mud....if the Athlon counters Intel at every performance point...which is quite possible. In that case Intel may well opt for more profit and we will have an oligopoly(digopoly...is that a word?) type of market and AMD and Intel will both share in some good times or both share in bad times. If Intel did not care about share price they might go for all out price war on all CPU fronts. This could cut CPU earnings by 50-75%. I do not know what % the CPUs earn of all Intel earnigs, but I suspect it is the lion's share so we may have an armed truce for a while?? Bill