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

To: Bill Jackson who wrote (82053)	12/4/1999 1:45:00 PM
From: Dan3	Read Replies (2) \| Respond to of 1573092

Re: Intel can bear those hurts better, but it will say goodbye to high SP... I'm not so sure that's the case. CPUs for Intel are what flash has been to AMD for awhile - the profit center that pays for everything else. Intel had sales of about 22 Billion Dollars on CPU units of about 87 million for the last nine months. ASPs were around $215 in this period. If a serious price war took Intel ASPs down to $125, Intel would give up $1 Billion a month - which would put it well into the red. In such a scenario, I would guess AMD would be making ASPs of about $100 on rising unit sales and would be profitable - 2 million units at $100 per month is roughly double current CPU revenues, and puts AMD solidly into the black. If this were a case of a near term price war in flash, things would be different, but that's not the case. AMD needs at least $1 Billion a quarter, while Intel needs about $5 Billion. AMD is actually in a much better position to weather a CPU price war right now than Intel is. Regards, Dan