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

To: economaniack who wrote (251950)	5/18/2008 9:59:04 PM
From: Elmer Phud	Read Replies (1) \| Respond to of 275872

Economaniack You are beginning to look like the clueless one. I was Quoting Intel's filing and you condemn me for not understanding, yet you show nothing whatsoever that I failed to understand. In fact it looks like you agree completely with my comments. So who is clueless here? While we are on the topic of cluelessness, you fail to have even a superficial understanding of the semiconductor business. These are not commodities. We're not raising corn or soybeans where you can plant more fields and get more yield for a given number of tractors. Yield drives cost and in simple terms Intel has better soil. It yields more per acre so costs are less. The notion of the efficient supplier is meaningless here when there is no baseline of comparison. Who is an efficient supplier? No one else in the world competes in this arena. The fact that AMD's products consume more silicon die area, are considerably more difficult to produce with a SOI process with more metal layers, and therefore have higher defect densities makes any direct comparisons of cost meaningless. Had AMD as many fabs as Intel with the same overhead and ran them at full capacity they would still have higher costs than Intel if all else were equal. In fact all else is not equal because Intel simply enjoys inherently superior manufacturing efficiencies irrespective of scale. They have a better recipe and all AMD is doing is asking for an affirmative action plan to level the playing field to whatever tilt is necessary for them to compete. Yield drives cost and when the truth comes out you will see why Intel can sell far below what would be a loss for AMD. Now you can go back to pontificating about the law and I'll go back to semiconductor manufacturing for which I am well qualified to sit as an expert witness in this case.

To: economaniack who wrote (251950)	5/18/2008 10:29:32 PM
From: jay101	Read Replies (2) \| Respond to of 275872

HOW does AMD trying to GIVE AWAY 1000,000 processors to HP fit into all AMD's "cost equations" and "below cost" accusations? <"AMD offered HP One Million "free AMD Processors". They (HP)only kept 160,000 ..... "Left 840,000 free AMD processors on the table..." (I thought AMD accused Intel of "dumping processors below cost", in one of their briefs. AMD was trying to give them away for nothing ..... ) UPDATE: AMD Outlines Evidence In Antitrust Suit Vs Intel May 05, 2008: 04:13 PM EST <<.......... Among the few tidbits made public in AMD's brief was mention of a decision by H-P to accept only 160,000 of one million free chips offered it by AMD. "No rational computer manufacturer would leave 840,000 free, state-of-the-art microprocessors on the table unless it had been foreclosed from using them by exclusionary conduct (by Intel). And that is precisely what happened," AMD's brief reads............">> money.cnn.com

To: economaniack who wrote (251950)	5/19/2008 12:02:48 AM
From: Tenchusatsu	Read Replies (2) \| Respond to of 275872

Economaniack, none of your definitions make any sense whatsoever. Let me just pick-n-choose some of your statements and point out the inaccuracies: > In the narrowest definition of short term marginal cost, the marginal cost is surely 0. Marginal cost is NEVER zero by any definition imaginable. Even if you waved a wand and created another unit without any cost in materials, you still have to ship the product, and you still have to pay whoever is waving that wand (unless you somehow get Harry Potter to work for free). > The marginal cost of a fab's worth of output would include the entire cost of the fab amortized over its lifetime production. Wrong. No matter how you amortize the cost of the fab, that still represents the FIXED cost. > AMD is pointing out that in an industry with high fixed costs and low marginal costs, marginal cost pricing is tantamount to selling at a loss, and is profitable only if the firm can price discriminate (sell some product at higher prices) which is the hallmark of monopoly pricing, and which is at the heart of AMDs case against Intel. If that's the "heart of AMD's case," then the case will fall apart, plain and simple. Selling at marginal cost is NEVER a sustainable strategy in any industry unless you have zero fixed costs. Hence that point of yours is irrelevant. AMD's argument goes like this: Intel should sell at prices that allow AMD to recoup both their fixed and marginal costs. In what free market should any business ever price their product based on the COMPETITION'S cost structure? Like Elmer said, AMD's argument is indeed pathetic. Tenchusatsu

To: economaniack who wrote (251950)	5/19/2008 2:30:37 PM
From: Petz	Respond to of 275872

Economaciac, exactly. re: in an industry with high fixed costs and low marginal costs, marginal cost pricing is tantamount to selling at a loss, and is profitable only if the firm can price discriminate (sell some product at higher prices) which is the hallmark of monopoly pricing, and which is at the heart of AMDs case against Intel. It's worth pointing out that the standard accounting definition of "Cost of Sales" doesn't include any overhead items, such as marketing or even R&D development, but it DOES include depreciation of the fabs. Clearly, a definition of marginal cost that does not include at least depreciation is an irrational one to use in the application of anti-trust law to the microprocessor industry. If you take Intel's Cost of Sales, subtract 25% for non-CPU products, you're at $3,350,000,000. Intel had about 50M units. So the cost per unit is about $67. Of that cost, only $17-$20 is depreciation. Using 20% as the average OEM discount to retail unit-one price, that means that anything at Newegg for less than $84 is selling below unit cost. A quick check shows 10 of 35 Intel desktop processors seling for $80 or less. Petz

To: economaniack who wrote (251950)	5/20/2008 7:25:53 AM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 275872

>> AMD is pointing out that in an industry with high fixed costs and low marginal costs, marginal cost pricing is tantamount to selling at a loss, and is profitable only if the firm can price discriminate (sell some product at higher prices) which is the hallmark of monopoly pricing, and which is at the heart of AMDs case against Intel. << Can you point to even one instance where a US court has accepted this method for declaring a price to be "below cost" ?