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

To: tejek who wrote (108260)	4/28/2000 2:13:00 PM
From: Y. Samuel Arai	Read Replies (2) \| Respond to of 1575608

Ted: re:if there is a price war, AMD will be hurt badly. AMD's only hope right now is that Intel (because of its screwups) can not afford to show a bad quarter earnings wise.....bad in the sense that their profit margins are reduced, not eliminated I'm not sure how much Intel can lower prices. They probably won't be able to offset reduced CPU income with investment gains to the extend they did in Q1. Sam

To: tejek who wrote (108260)	4/28/2000 2:18:00 PM
From: pgerassi	Read Replies (1) \| Respond to of 1575608

Dear tejek: Intel will be even more badly hurt in the stock price. If price war in high performance segment happens, Intel will have to lower prices of its CPUs by 50%. This will cause their ASP to drop to less than 80 to 90. At those prices, Intel will lose .5 to 1.5 Billion a quarter. At those rates, what would their stock price be? I would say around $5 to $10. AMD would have the same ASP and may lose $75 Million remembering the long term Flash contracts. Thus AMD stock price would be about $12 to $16 about where it was last year. Intel could outproduce AMD, but that would not result in the same price reductions since AMD's ASP would tend towards Intel's ASP. Intel's ASP would shrink to AMD's ASP. AMD has shown that it makes money at this ASP. Intel will lose money BIG TIME at AMD's current ASP. Thus the price war is no longer in Intel's best interest. Pete

To: tejek who wrote (108260)	4/28/2000 3:14:00 PM
From: that_crazy_doug	Read Replies (2) \| Respond to of 1575608

<< Intel has a history of manu. chips at very low prices, AMD does not.....if there is a price war, AMD will be hurt badly. AMD's only hope right now is that Intel (because of its screwups) can not afford to show a bad quarter earnings wise.....bad in the sense that their profit margins are reduced, not eliminated; meaning they can afford only to wage a price 'skirmish' and not a price war. >> While Intel is in a shortage I don't think the threat of a price war is too great. Especially when the shortage is most strongly felt in the most expensive range. They can't supply the high end where they make all the money. AMD can make up considerable losses at the low end by selling just a few 1 Ghz pcs. Also, I believe one of the great fallacies about AMD vs Intel is that AMD couldn't compete due to prices. I think AMD couldn't compete because the k6-2 and k6-3 line weren't worth buying.