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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (125780)	1/22/2001 11:14:25 PM
From: Dan3	Read Replies (3) \| Respond to of 186894

Re: makes you think AMD will be immune to pricing pressures from Intel? In the past, AMD has always operated at cost disadvantage to Intel. Intel needs higher profits to support itself, but has never before had any trouble making huge profits, even after some big price cuts. This year, Intel has built up a mini-conglomerate of "hope for the future" companies that are losing money at a rate of $2.5 Billion per year. Between making up for those losses, and funding its aggressive capex program, if Intel were to go all out on price cuts, they could burn through their entire cash reserve in a year - that won't happen, but Intel isn't going to be too extreme about giving away its products, either. The P4, as long as it's limited to 217mm2 and rambus is horribly expensive to produce. AMD has very clean, directed, strategy to ship its processors on a DDR platform that looks like its going be low cost, high performance, and the next industry standard. AMD is doing with DDR exactly what Intel hoped to do with Rambus - getting a money saving head start on the competition by setting the standard that its competition has to scramble to catch up to. The first iteration of SDRAM and P4 most likely won't be pretty. AMD has been designing and tuning its chips in the expectation of the DDR platform for the last 3 years while Intel has been tuning its chip's designs for Rambus. It seems to me that the Intel machine spun off the road on a slippery patch of Rambus, and is going to be stuck in a ditch for most of this year. After that, it depends on what each company can ship in Q4. But near term? Given the costs and production constraints of P4, Intel's cash flow needs, and the performance limits of P3, yes, I think AMD is largely immune from pricing pressure from Intel. Dan