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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: A. A. LaFountain III who wrote (52629)	3/15/1999 10:48:00 AM
From: FJB	Respond to of 1574054

1) I believe that IDC is now pegging PC units in 1Q at up 14% year/year, but down 14% qtr/qtr. 2) We know that AMD's MPU supply is likely to be down >= 10% qtr/qtr, but even the <= 5MM unit rate is still a triple from 1Q98. 3) Highly unlikely that Intel's qtr/qtr production capacity has slipped. 4) Ergo, high degree of likelihood that 1Q99 MPU supply growth > demand growth. Actually, it is not that simple. Intel is most likely ramping production of Celeron and Dixon product which have die sizes of 154mm² and 181mm² respectively. OTOH, PIII has a die size of 123mm² vs. a PII die size of 131mm². The Celeron product line is becoming a larger percentage of overall unit shipments. Demand growth at the low-end of the PC market, with a larger die Celeron, is higher than that of the high-end. Also, Intel is continuing its plan of bringing most SRAM production in house. Intel is the only supplier for the SRAM that comes with a Xeon processor. SRAM uses a lot of wafer area. The bottom line is that only Intel can model their processor output in unit terms. The question of whether unit shipments of x86 processors are currently outstripping supply is open to debate. The debate is further complicated by adding the question of what the supply or demand is at a certain clock speed. If you look at the middle of the PC market now, 350MHz/366MHz, supply and demand appear to be in balance. If you go to lower clock speeds, there is more supply than demand. At higher clock speeds, Intel is the primary supplier and is in charge of pricing. I think Intel's capacity utilization is very high. Bob