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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
Monstar L
...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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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.
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.)
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you believe wrong.
Intel, amd and IBM are the three last big behemoths of bleeding edge chip fabrication. And to keep up IBM and AMD signed a deep alliance at the beginning of the decade.
First outsourcing for chips from AMD was last year and it took 5 years and a failed deal to arrange.
Normally in these conditions partners are NOT fungible. As in THERE ARE NO 65nm merchant fabs in the world who can compete with Intel or AMD
They are clearing inventory. The point is: what will the price of the new parts be??
In the chip industry this is the way price wars erupt. You make MORE space than necessary in your listings and the new parts start lower than where the older parts started.
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
Ummm, no. Only the very TOP of the line chips cost that much. You can still buy "slightly less than uber" processors for a great bargain. Your essentially bitching because their product offerings are more varied then they used to be. Cry some more, your tears cool my CPU down.
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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