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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: SteveC who wrote (66893)	1/2/2002 6:37:05 PM
From: niceguy767	Respond to of 275872

SteveC: "Why would this trend stop in 2002, as long as AMD can periodically release faster Athlons? If it continues, it's in Intel's self interest to abandon the price war strategy and raise its chip prices. Intel may as well raise its ASPs if it can't undermine AMD's market share based on price discounting. AMD, of course, would see a bump in its ASPs if Intel reversed course. Thus, the most surprising development of 2002 could be an end to the microprocessor price wars." Microprocessor pricing based upon economic utility is the long term trend...In this initial phase, AMD has gained premium pricing for equivalent MHz at 1.6 MHz as economic laws would dictate given the XP's "unrivaled performance" advantage over p4 at equivalent MHz...As we move up the gradient, perhaps AMD's product lineup will eventually command a premium at low, mid and high end on the gradient...That certainly would seem to be the trends direction over the past 2 years...One might by extrapolating on this trend predict a convergence in AMD/INTCy ASP's...If true, that can only be good, in a relative sense, for AMD!!!

To: SteveC who wrote (66893)	1/2/2002 7:14:41 PM
From: combjelly	Respond to of 275872

"the most surprising development of 2002 could be an end to the microprocessor price wars. " That'd be a huge surprise. Both sides are gearing up, shrinking their die, adding capacity, showing their missiles and tanks on parade... Now it may be that when the blood is running in the streets that the system prices will be attractive enough to start soaking up that extra capacity. But if it doesn't, it looks to be brutal. On AMD's side, they have changed to an organic (ok, it's plastic) package which is cheaper than the previous ceramic. In addition, they will be ramping their 0.13 micron process. They are already hip deep in Durons of various flavors, and they will be farming out Appaloosa processors to (likely) UMC. The later move might cost more than doing them in house, but they have the flexibility of not having to dedicate their own facilities to it. Based on what AMD has said, they will likely produce on the order of 25 million TBreds and Bartons this year. Add in another 6-7 million Palominos and you exceed their unit sales for 2001 and that doesn't even count the Morgans and Appaloosas that they will manage to sell, and that could be as much as 10 million units. Maybe more. In the other corner is Intel. They to will be transitioning to 0.13 micron and have a whole handful of fabs coming on line to do it. Sure, their die size is bigger, but they will be throwing a whole lot of silicon at the job. They have already gone over to organic packages, I can't say if the 478 pin version will be significantly cheaper than the 423, I personally doubt it. Depending on exactly what their mix between Tualatin and Northwood will be, their average die size may very well be in the range that AMD is looking at now. I won't even begin to estimate how many Intel is capable of making this year, but it likely exceeds the total current market, possibly by a lot. I dunno. Unless there is a big spike in demand, I don't see how ASPs of either company can be $100. I suspect that it will be significantly less than that.