More AMD Price Cuts

[Brian]

More AMD Price Cuts (http://www.thetechlounge.com/news/11438/More+AMD+Price+Cuts/)

"AMD's move to cut costs seems to signal that the company may be pulling back on plans to claw market share away from Intel, a campaign that has been costly for both companies. While AMD fought a successful three-year campaign to grab market share, Intel began hitting back last summer, overhauling its lineup of processors and slashing prices.

Although cutting costs may not make it easier for AMD to steal business from Intel in the future, it also means AMD may be able to run the business it does have more profitably.

In its announcement Monday, AMD said its server and computer processor business is selling fewer chips--and getting less for each chip. Analysts blame an inventory clogged with less advanced processors.

This is good-ish news. Don't worry too much, and remember, this is the <em>perfect time</em> to build a massively high-end PC for cheap. Especially since 8600- and 8500-series nVidia cards are literally days away from shelves, and it's probably reactionary to something the ATi rumor mill is having a ball with. Remember, we <a href="http://www.thetechlounge.com/article/385/AMD+690+Chipset/">really like ATi's 690 chipsets for AM2</a>.

<a href="http://www.dailytech.com/article.aspx?newsid=6848">AMD Cuts Prices on High-end Processors</a> @ DailyTech"

Read full story here (http://www.forbes.com/technology/2007/04/09/amd-intel-earnings-tech-cx_bc_0409amd.html)

[PsychoSnowMan]

Isn't this bad-ish news? Sure, in the short term high end AMD processors will be available for a low cost. But what about next year? And the year after that?
Maybe I'm not reading this right, but if AMD is backing down from it's competition with Intel, won't we see less innovation, slower technological advancements, and prices falling more slowly in the years to come?
When you get the back and forth competition that is seen between nVidia&ATI, and AMD&Intel they're forced to make faster hardware and at lower prices in order to attract their portion of the PC market. But if AMD is going to stop directly competing with Intel and start devoting their research to low level and server type processors Intel will be free to keep prices high longer for high end buyers.

[Max Slowik]

Not completely bad news. Processor innovations we see today are paid for a year or more in advance.

AMD is selling their inventory off, this we know. Two possibilities, which are not mutually exclusive:

They profit now, get some fluid fundage, at the cost of having as much money in their coffers. We also know they're tapped, because they're asking their investors to borrow more.

They're clearing their shelves to make way for new product. They've been hit hard on the server market and the high-end desktop segment, and have a lot of silicon getting dusty.

I think both are true. Barcelona is already being tested, and it's very close to release. They need cash now to make two years of engineering a success.

Bear in mind that Intel has also been cutting prices well past their own safe margins, and that AMD is making friends with the courts regarding their lawsuit against Intel; they might be counting on the windfall, or at least hoping that their stocks will profit from a win.

AMD has never had the upper hand, the only difference now is that Intel is treating them like the threat they are. But their whole process is designed to make chips with less money and more pressure, so it shouldn't be unfamiliar territory.

All I'm saying is that their cutting costs isn't exactly a death knell. We'll know they've been crushed when they're Via.

No offense to Via, I actually really like their products. A better analogy should be Cyrix. We'll know they're done when AMD is likened to Cyrix.

Also, ATi will always be there to pull them through tough times, right there with their Spansion.