Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: AK2004 who wrote (201163)	6/8/2006 5:14:31 PM
From: Sarmad Y. Hermiz	Read Replies (1) \| Respond to of 275872

Do we have a way to figure out the effective price reduction ? Was dell getting a 50% discount from list price anyway ? And this is just a 10% reduction that will be made whole from selling the chipset ? I don't expect it is this benign, but I also don't expect Intel's revenue to drop 60%. I would expect it is mostly figured in the $8B revenue guidance.

To: AK2004 who wrote (201163)	6/8/2006 6:08:45 PM
From: firthoffourth	Read Replies (1) \| Respond to of 275872

That's an interesting question. AMD does have a wild card in the 800 series opteron product as it is the fastest growing component in AMD's product line and it is the least vulnerable to price cuts. Intel could give away its xeon mp for free and AMD would continue to takes share at the same rate. These proposed price cuts, should they occur as the analyst suggests, will be far more painful for Intel than they will for AMD. What if they do this and don't win back any share? I think we have reached a point, or are very close to it, where the Intel brand carries no premium price for equal performance - and why the hell should it?? ASP convergence has been happening for years, but pretty soon they will be within 15% maybe even closer. How well can Intel possibly do if they have to live on $115 ASPs? AMD will certainly need to respond, but they will be doing so at a time when production capacity is increasing 5 fold (65nm on 12inch). These price cuts tell me Intel is VERY concerned about the prospect of this. I wonder how long Intel's BOD would allow this pricing to continue if it sent Intel into the red and AMD still took share and operated at a profit??