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To: wanna_bmw who wrote (141525)	8/14/2001 1:18:10 AM
From: Paul Engel	Read Replies (4) \| Respond to of 186894

Beamer - Re: "If IBM is so familiar with the benefits of SOI, why would they be abandoning AMD now? I figure you might have an interesting explanation of this." First, the IBM Microelectronics division (the Semiconductor FOUNDRY part of IBM) is entirely separate and distinct from IBM's PC division. They each have profit goals - and what is good for one (advanced technology) may not be good for the other (low cost PCs). For example - SOI may provide a unique technology and pricing advantage for the Foundry side - meaning that SOI may COST more to produce, but it will SELL MORE to an end customer. Now, the PC division needs to keep costs in line - and reducing their CPU suppliers from 2 to 1 adds a LOT to lower costs - SEPARATE Motherboards and test procedures can be eliminated. Further, instead of splitting their CPU orders across two suppliers (Intel and AMD), IBM can now increase their CPU orders to Intel - to replace the abandoned AMD parts - and that larger number of Intel CPUs will bring their overall cost per CPU DOWN as the volume pricing schedule goes into effect. Inventories are hence reduced - and IBM can use Intel as their Inventory buffer - with Intel's more massive manufacturing capacity and JIT delivery (aka Dell Model). And another area is support - AMD's CPUS/Motherboards/Cjhip sets range from quirky to UNSTABLE - and dropping AMD reduces support costs very FAST !!! Also - IBM just announced their TeraScale ITanium-based networked GRID system - so IBM knows that ITanium and IA64 is HERE AND NOW - and AMD's Hamster SOI is a DREAM-In-THE-FUTURE - with more pot holes than the road to Burma. IBM sees the writing on the wall - go with the Company that brought them to the PC party (Intel) rather than the little flirt that keeps dropping her skirt for a cheap thrill (AMD). Paul

To: wanna_bmw who wrote (141525)	8/14/2001 1:33:02 AM
From: Tony Viola	Respond to of 186894

Paul, another guy in the AMD mod thread brought up an excellent question. If IBM is so familiar with the benefits of SOI, why would they be abandoning AMD now? I'm not Paul, but I can sort of come up with an explanation for this from an IBM divisional culture point of view. The new IBM, that I alluded to in another post, is one that will sell any product from any division to anyone, even a fierce competitor. Gerstner would sell his own mother, you know. Another part of this overall corporate philosophy is that the different divisions are on their own to a very large degree. I don't think they worry about each other very much at all because their own profitability is so paramount. It's fish or cut bait. So, the PC and small server division, in these very tough times, decides to consolidate products, something had to go, and Intel was nowhere near in the crosshairs. So AMD gets pruned. SOI comes out of the semiconductor research division, which might as well be in a completely different company from the PC and server division, with the way interdivisional culture mentality at IBM. Too bad. That's business with the Gerstner IBM. C'est la vie. Another thing I thought of is that since it appears that IBM is getting behind Itanium pretty strongly, they may have decided to leverage as much as possible with Intel now, as Compaq is doing. Tony