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AMD's "Frantic Price Cuts" May Pressure Intel
kog777 writes in with news of a Needham analyst report alerting their clients to a possible price war between AMD and Intel. Analyst Y. Edwin Mok notes that AMD has cut its prices three times in three weeks. He says that Dell has been playing off the two chipmakers against one another to drive costs down. He suggests that bargain-hunting clients avoid both AMD and Intel stock for now. As an aside, Mok notes that so far Vista is not causing a spike in demand for chips. This story hasn't been picked up very widely; other coverage is at Seeking Alpha.
shares of AMD rose 3.17 percent, or 46 cents, to $3.17
:P
Maybe he should check his math processor
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to see how many suppliers they can drive out of business before they drive themselves out of business.
...is totally OT, but it's where he says that a seasonal dip is occurring in PC sales in spite of the release of Vista, which is not causing a rise. In other words, people are either not buying Vista, or are successfully (?) running it on their existing computers. I suspect it's more the former, since Vista is reputed to run slowly on even the latest equipment.
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I wonder how much of the price cuts have to do with the fab costs. Intel has pretty much completely transitioned to 65nm fabs for their new chips, while AMD is still in the middle of the transition and just launched retail 65nm chips at the beginning of the year. Perhaps AMD is dropping their prices to get rid of all of their 90nm chips, and/or they are getting good deals from the 90nm fabs as they drop prices to compete with the 65nm fabs (I believe AMD outsources a lot of their fab work.)
Isn't that what competing companies supposed to do? This has been happening for a long time. During the 1990s AMD was selling their chips for cheaper prices then Intel. Then around the Early 2000s AMD finally got a good reputation and better then Intel's so Its prices went up (Increase in demand). Now with Intel Core Chips which perform very good and are relatively inexpensive Intel Chips are getting more demand. So in order to keeps AMDs line selling they will Lower the prices on their chips. Now Intel will choose wether the demand for their chips at there prices will still work with the market or they will need to lower the chip prices. Now a word of waning about Price Wars, The consumer usually wins at first then they they slowly get screwed as the war lingers. Lower Price Chips means less R&D and Less Good Improvements and More Quick Patches and Fixes. So quality will drop. I know people want to think of a perfect world where we get Top Quality Products at Discount Products, But in reality that is not the case, I am sorry but the $400 Dell Laptop is Lower Quality then the $2500 MacBook Pro. There may be a feature that is better but overall you are getting less.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Please, mr dell, start a price war between RAM manufacturers next! I live in perpetual obsolescence thanks to the dramatic cost of DDR and DDR2! Won't someone think of the child processes!
There has been a "possible price war" for the better part of a year with these two companies. AMD has cut prices a couple times now and Intel has responded similar moves and with new chip technology that proved to be a large, significant advancement. I am not sure what we are looking for to confirm a price war, but as far as I can tell, these companies have been going at it for some time now. With the industry changing every year it seems, it might be difficult to classify this as a price war. Is this simply strong competition in a large market that effects both business and individual consumers?
For those looking for a "price war" you do not need a confirmation. It has been going on for over 7 years now. This article dated Feb 28, 2000 details price cuts by AMD in response to Intel cuts. Then, look who is still at it 6 years later - Price Wars Intensify as Intel Slashes Chip Prices. It is a seesaw game that, hopefully, will not end any time soon. The more they go at it, the more the consumer stands to gain.
Now a related question... Do you think consumer demand or competition with each other is causing the rapid advancement in chip design and architecture.
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the analyst industry is quite amazing - all you have to do is repackage common knowlege as something special and people will pay you for it!
seriously - AMD and Intel are normally out-of-phase in product intros. it's been this way for many years, so we have to assume it's deliberate. Intel made a major improvement by souping up the Pentium-M line into Core2, and has gained a nice lead in some, even most, benchmarks. mainly due to some fairly narrow improvements that AMD hasn't yet answered, like 1-cycle throughput SIMD operations. AMD's current offerings are largely unchanged since the original Opteron intro (2003?), except for smallish tweaks like bigger caches, faster memory, doubled cores. AMD still does well for applications which are sensitive to memory bandwidth, for instance - part of the original technological jump of the K8.
AMD is about to introduce their response to Core2, and it seems quite promising based on the hints AMD has provided. Intel's not in a position to respond immediately, since 45nm production is some way off, and it (Penryn) will apparently be just a shrink of the current Core2 design.
in short, it's only sensible, sound business practice for AMD to drop the prices of their mature, high-yielding, partly-outsourced half-gen-old products. performance is still competitive with Intel's products - at a time when Intel's yields are probably not yet mature. in a way, this sets the stage for AMD to introduce its next-gen parts at a more comfortable margin.
Price wars (or marginal return on investment) are always going on for the products of fabs still producing older technology. It is just more noticeable when the old technology is still highly desirable. From a business view point, it is desirable to get every last dollar return for the multi-billion dollar investment made in the original technology as long as the marginal cost of production is less than the revenue obtained. When the curve inverts then the fabs get taken off line, or upgraded. AMD has next to nothing to lose on the price drop of outsourced fab product except cannibalized sales from the new 65nm. Since supplies are limited and selling, cannibalized sales has to be a zero quantity at present.
ATI has not released its upcoming DX10 graphics card yet, so the only available DX10 card is the Nvidia 8800 with lousy drivers. ;-)
Vista drivers for older (DX9) cards also suck, both for Nvidia and ATI. But for DX9 you can stay with XP anyway
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Why keep bashing Microsoft, calling it evil etc? It is the consumers who should wake up. Let us say I give these companies big discount so that they can "make the numbers" for this quarter. But that would force them to give all their data to me and they have to pay me every quarter to access their own data. In a rational world, I would be laughed out of the business meeting in no time. But that is precisely what is happening in sales meetings between MS and the fortune 500 companies.
When it comes to the chips Dell is able to play AMD against Intel. It is in Dell's own interest to have a competition in OS/Office market so that it can play one against another and reduce the cost of computing to its customers so that it can sell more. But Dell buries alternatives deep, makes it difficult to buy the alternatives. Why? Why? Isn't there anyone who can break through the non-disclosure agreements and the secrecy and shed light on why corporations are acting seemingly irrationally? Sunlight is the best disinfectent.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
I'm sick of seeing these chips at outrageous prices. Who other than the most rabid gamer is going to be willing to fork over $500 - $1000 (US) for the latest processor? The worst part of it is, the processors are starting out so overpriced, that when they start to drop, it takes over two YEARS before they become reasonable. I don't know about the rest of Slashdot, but I'd like to be able to get something less than 4 generations old at a decent price point.
It used to be that you would spend, AT MOST, about $100 - $200 (US) for the latest AMD offering (usually much less, under $75.00 US). Intel was never considered for gamers or home-builders because they were overpriced and underpowered. Lately AMD has been pulling the same crap that Intel was pulling back in the 90's. End result? We now have two chip makers, both with overpriced CPU's, trying to compete. It's about time there was a price war! They are using smaller and smaller die sizes, and are thusly getting more and more out of each silicon wafer. The damn things should be getting CHEAPER not exorbitantly more expensive!
Bring back the sub-$200.00 bleeding edge CPU. It's well past time.
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Careful with the "power usage" statement. While Intel certainly has lower power consumption in their Core2Duo processors, that's only in relation to the power-hungry Prescott-based processors. Intel's PR department has made a lot of hay out of their decreased power consumption. The fact of the matter, however, is that Core 2 Duo processors at 65nm now have about the same power consumption as their Athlon 64 X2 counterparts at 90nm--about 65W.
I highly recommend taking a look at processor electrical specifications. And keep in mind that Intel's power figures are more optimistic ("typical") than AMD's ("max").
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Us gutter IT guys can grab up Sempron 64 3000+ chips for absolute dirt right now. I built my daughter a computer to play Quake4 on for less than $150.00 and she can play it at high detail settings with that low end Geforce 6800GT on that cheap motherboard and really slow processor like that.
Hell that setup has the power to record 4 NTSC tv channels and 1 HD channel at the same time. Makes a great cheap MythTV backend recorder.
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2) if you can run w2k or xp on a system you'll almost certainly be able to run Vista on it with no changes.
in a word... no.
vista likes dual core (or 64 bit capable) cpus. It can run on single core but you will not like how it runs. I think vista was supposed to be only 64 bit. During the testing on beta all the 64 bit capable machine ran it a lot better. And the 1 GB of RAM. I think ms has a deal with the RAM people, putting in 2 GB makes xp, 2k, and vista much happier.
remember that 2k runs fine on a PIII 800. Even with 2 GB of RAM the PIII 800 has a hard time with vista, so our tests showed.
I have installed 2k and XP on a PII 350 machine with 512 MB RAM. It ran, i wouldn't want to do anything demanding on the machine but it does work.
Nowadays just working it not enough. It has to work, and owrk well, and work in a reasonable amount of time (the faster the batter)
Core2Duo may have lower power use but chipsets still use more.
Intel's new exons may use less power for the cpus but when you add the chip set and the FB-Dimms it is about the same as amd cpus + chipset + ddr ecc ram.
Both articles linked mentioned that Vista just wasn't pushing PC sales as anticpated, but neither article shed much light on what set of numbers were used to determine what this push should be.
.." (well maybe not that simple, but you get the point).
.. I'm not a stock holder of either, or complaining :)
Is this a forecast that MS puts out for each release, or is it determined by historical data? Since there's nothing really historical about Vista's CPU demands for the average user (well, not much really), how the heck did they come up with any kind of number?
This would (I guess) have to be MS saying "This is what we expect people to do with it, this is what we expect businesses to do with it, and this is what we expect CPU demands will be in both cases, hence here's the data to forecast what you'll be selling, we expect to push xxxx copies per day
Another way of looking at this would then be (speaking as Intel or AMD):
"Microsoft sold us a load of fud, we need to keep focused on attacking the virtualization and server market, and the other guy already has a strong foot hold there." (as either could say that about the other).
So in short, it looks like both AMD and Intel learned nothing from Enron's "virtual asset" mindset, which was counting on money that wasn't in the bank yet, but you were *pretty* sure would be there. Typical, I'd say unless I'm way off on how these predictions come into play?
I also saw no data in either article about growth either company made which they now need to find another way of paying for, but I guess that's not going to be availble to sift through for a while.
If I were either company, I'd be treating Vista like Bob until some longer range (real) predictions could be made. But hey, cheap servers
Just to expand on the point I think you're making, companies generally go out of business when the profit they generate is less than the amount of money that a similar amount of capital could make, if invested elsewhere.
I.e., if your semiconductor business, which has physical and cash assets of $1B USD, is generating less than $1B invested directly in the stock market, then it probably doesn't make sense to keep going, unless you expect that you can turn the company around and get it more profitable.
In real life, many companies shut down (or get shut down by their investors) when the price per share * shares outstanding is less than the net real assets of the corporation. That's basically saying that the stock value, which is sort of a prediction of the company's future performance and overall "market value," is worth less than the assets that it's using. Thus, it's liquidated. (However, there were some exceptions to this; there were companies in the 1980s that were basically ravaged by "raider" investors and sold off piecemeal, who probably could have been turned around under better management.)
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I'm happily running Vista on a single core cpu right now, without any performance problems... Care to give any sources on that claim?
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I wonder when the Vista version of LitePC http://www.litepc.com/ will be available. Once one can successfully remove DRM and other cruft from Vista at the click of a button, it should become more popular.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
At my company we are waiting to see which executive demands Vista first on his laptop because "it runs fine at home." Imagine running Vista on a laptop bound by 512MB-1GB RAM, a 2.xGhz proc, a 5400RPM harddrive with Pointsec encryption and SAV real-time virus protection. Why not just paint an image of a desktop on the LCD--you'll see the same results with the OS.