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

To: economaniack who wrote (219840)	12/9/2006 7:28:18 PM
From: kpf	Read Replies (1) \| Respond to of 275872

e ...but the efficient scale is closer to AMDs size than Intel's. At 30% or so of the market most of the cost of an AMD die is production cost, which is scaling more or less linearly. This not only contradicts every basic textbook of semiconductor-economies, but is, with all due respect, plain bullocks. Pardon my french. K.

To: economaniack who wrote (219840)	12/10/2006 4:11:03 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 275872

Economaniack, > Tench, a natural monopoly is characterized by decreasing average cost across the range of economically significant sales. There may also be significant barriers to entry. The result is that the lowest cost solution is for one producer to serve the market hence "natural monopoly". Sorry, but economies of scale do not lend themselves to "natural monopolies." That's hogwash. Significant barriers to entry do, but then that would suggest that hardware lends itself more to a natural monopoly than software. After all, you don't need to invest in a multi-billion-dollar fab (or make a contract with a multi-billion-dollar foundry) in order to write software. Hardware certainly has high barriers to entry, fabs, processing expertise, design expertise and patents among them, but the efficient scale is closer to AMDs size than Intel's. At 30% or so of the market most of the cost of an AMD die is production cost, which is scaling more or less linearly. More hogwash. AMD doesn't have 30% of the market yet. Intel still has greater than 70% of the market. According to your logic, that would suggest that Intel has the greater efficiencies of scale. > "What's the hardware analog to Linux and Firefox?" AMD of course. You mean I can get AMD processors for free? And all I have to do is download them over the Internet? Tenchusatsu

To: economaniack who wrote (219840)	12/10/2006 4:21:30 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 275872

Economaniack, more on natural monopolies: en.wikipedia.org > An industry is said to be a natural monopoly if one firm can produce a desired output at a lower social cost than two or more firms—that is, there are economies of scale in social costs. Unlike in the ordinary understanding of a monopoly, a natural monopoly situation does not mean that only one firm is providing a particular kind of good or service. Rather it is the assertion about an industry, that multiple firms providing a good or service is less efficient (more costly to a nation or economy) than would be the case if a single firm provided a good or service. This is used to justify the government giving legal monopolies to utilities or subway systems. Now the only way to argue for Microsoft being a "natural monopoly" would be to declare the Windows operating system as a "public utility." In this case, the government decides that for the good of society, all software must conform to the Windows standard. Thus you can get rid of the "social costs" associated with incompatible software, etc. Tenchusatsu