AMD's "Frantic Price Cuts" May Pressure Intel 135
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.
Best bit in the article... (Score:5, Insightful)
Fab prices (Score:3, Insightful)
Umm Yea... So... (Score:5, Insightful)
Re:This must be a dell challenge...... (Score:2, Insightful)
How would Dell drive people out of business by making two companies compete for their account? It is not like anyone will sell at under the cost for a prolonged time. Dell only has about 20% of the market. They are not vital to anyone's survival.
Price War (Score:5, Insightful)
For those looking for a "price war" you do not need a confirmation. It has been going on for over 7 years now. This [my-esm.com] 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 [pcworld.com]. 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.
analysts produce news like cows produce methane (Score:5, Insightful)
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.
Re:Umm Yea... So... (Score:4, Insightful)
Isn't that what competing companies supposed to do?
Yup.
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'm not sure I agree with this. No company with any sense ties their R&D budget directly to their incoming revenue. R&D is an investment and the amount should be based upon a risk/reward/intitial cost assessment. Just because I lower prices by 20% does not necessarily mean my investment in some new tech has any less potential for profit in the future. The real danger is not lower quality, but the possibility that one company might "win" and monopolize the market, then use that monopoly to entrench their position and ruin other markets. For example, suppose Intel drives AMD out of business, then introduces some patented feature to the "standard x86" chipset. Or suppose they dominate the market, but ship integrated graphics chips with all CPUs, thus forcing consumers to either use theirs or buy a second one as well, that works better.
Re:Price War (Score:3, Insightful)
I'm sure most people don't need as much horsepower as they are pitching now.
90nm Fabs aren't going anywhere fast. (Score:3, Insightful)
Re:Umm Yea... So... (Score:4, Insightful)
Price war and competition (Score:4, Insightful)
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.
Good. (Score:3, Insightful)
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.
Re:Best bit in the article... (Score:2, Insightful)
Re:I'll care when AMD catches up to the Core 2 Duo (Score:3, Insightful)
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.
Re:Best bit in the article... (Score:3, Insightful)
I think you're reading too much into that. I read it just as "people aren't in a hurry to move off XP". There's nothing to say there's a drop because Vista sucks or anything - it just says people keep buying PCs at a regular pace based on *their* demand. The last time around, XP Home was a huge upgrade over Windows 98SE, and a reason to upgrade in itself. Vista over XP? For all the Windows bashing here, XP works quite well, supports everything except Dx10 and has uptime in the range of weeks for most people I know. I see no reason to rush things just to get on Vista, and neither does anyone else it seems. Personally I'm more waiting for Debian stable, but they're over two months overdue and haven't even gotten RC2 of the installer out yet...
Re:Fab prices (Score:1, Insightful)