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you...
Wow... Not sure what information leads you to believe this, but so far
me...
I guess it's a matter of perspective, but INTC has been talking about CMW for so long now that that it feels like they should be flooding the market by now. Instead we're seeing dribs and drabs of production and I fully expect q3 to see another large gain in INTC's inventory despite CMW doing "incredibly well" as I'm sure INTC will insist. I'm not impressed and nothing so far leads me to believe that INTC has worked out the 65nm production kinks.
Yes, I expect that those that held through the latest downdraft aren't thinking at all about buying more, and those that sold probably think that it's way too early to get back in. Both positions are wrong, in my opinion, but then that's just me.
For me when 4X4 hits the market most of INTC's CMW advantages disappear as AMD will still own the high end server market and will have retaken the enthusiast performance/mindshare lead. Laptops will probably belong to INTC for awhile longer, but AMD will be more than competitive in most makets on a price/performance basis. I certainly don't see INTC retaking market share in q3, which for me is the acid test of how well CMW performs.
We'll have to see how much CMW hurts AMD's GMs and bottom line, but I believe AMD will continue to earn more per share than INTC.
As the CMW implementation roars on at a snails pace I think we're seeing the real reasons why INTC put so much effort into maintaining P4 manufacturing. Despite the hyperbole it's hard to imagine that INTC would be happy with the way things are progressing/retrogressing. Maybe AMD was wise to take more time and get it right? Does this implementation remind anyone of INTC’s 90nm saga?
Any bets on when INTC will have their production ready for prime time? How long can INTC hope to make a market in P4s given the way they have slandered their own chips? By now the whole world must know a P4 is a POS, INTC has certainly repeated the story often enough.
X2 Turion test by Anad
http://www.hardwarezone.com/articles/view.php?cid=2&id=1904&pg=6
Them...
While Intel's Core 2 Duo processors are slated to be out in the third quarter of this year, AMD's next revision of mobile processor would be out to play catch then and probably give Intel a good run-in because AMD's next revision of the Turion 64 X2 would be based on the 65nm silicon process technology. Rumored to have a similar TDP as the current processors, you can probably imagine that it's going to be a lot smaller and faster even when nothing else is propped up.
you...
It could be an interesting trading opportunity if the stock goes up enough. What is the benefit of a larger chunk of the MP market compared to the loss AMD will have in other segments due to Core 2? IMO, the market still hasn't priced in the latter, so now might be the chance to buy some more puts. Question is, how many days will it take for this good news to get built in?
me...
Did you and Doug take singing lessons from the same teacher?
Yeah, let's hope NGA is close to what is expected or INTC is going to be very much out in the cold. I think I want more confirmation and I also want to see what AMD is going to do before I make any decisions.
It's pretty obvious that this secret wasn't very well disguised. There's a guy on Yahoo that has been saying it would happen this week. I believe he said he got the info from his broker.
Oh well, that's one of the chances you take by not being long a stock. Lots of other things could have had the same effect on the stock. Still very nice.
you...
AMD 2007, 2008 quad core CPUs thrifty on the cache front
me...
Went to Pinks last night for a hotdog. One of the things Charlie talked about was that Z-RAM was at least 18 months away. This sort of adds weight to what most of us thought would be the waiting period. He said Z-RAM works, but it's going to take a long time to get it designed in, tested, and produced.
you...
BTW, I do recall getting laughed at in March when I posted that
Intel will start a price war (I read it from some site). It
appears that rumors can be true.
me...
It wasn't me laughing, but I'm not sure I would characterize this as a price war yet. At least it seems AMD has deigned to enter the fray yet. Looks more like INTC is doing what it has to in order to position itself for NGA pricing and get rid of current inventory.
A one-sided price war is what, a shadow war? Kind of like INTC is shadow boxing with itself? Another interesting thing, I wonder if this means INTC could lose money this quarter?
All in all, it’s probably not a bad idea to tidy things up prior to the arrival of NGA and the resurrection of INTC from the dead. All those dead netburst processors lying around make for such carnage.
"Intel Chief Orders 'Wholesale' Review After Bleak Profit News and pricing to be used to regain market share."
Me...
This would only seem to make sense it INTC has/will have superior product, at least in Otellini's mind. Second, remember AMD can manage to demand a lot better than INTC can. AMD can always cut back on expansion to match demand, but INTC already has the fabs.
As I've said before, I doubt that Hector, given his generally conservative demeanor, would have been pushing so hard for capacity if he didn't already have some pretty concrete uses in mind for what will be produced. Maybe Otellini is really Charlie Brown and Lucy is pulling the football away again?
Anyway, if AMD and INTC do get into a real price war the winner, assuming similar product, will be the company that best utilizes its' resources. That is things like plant utilization, yields, and production costs are going to be of paramount importance.
Of the two contestants, given INTC's slothiness I would be betting on AMD unless NGA is a home run, something I kind of doubt. However, if INTC really gets serious about costs then things are sort of up in the air. I'll definitely start getting worried if INTC announces a RIF of say 20k or more jobs and a management reorg.
Obviously, this isn't going to do either company’s stock's price any good. But then no one really expected INTC to go silently into the night did they? Still, I doubt this will be a thermonuclear war, more like raids into the other side’s territory at points of perceived weakness. On the other hand this may be just what Otellini does best, marketing.
I wonder if Joe Osha has the power to remove Otellini? Sounds like something has changed. Another disastrous quarter was too much for someone to stomach?
About yesterday.
The most disconcerting thing to come out of INTC yesterday was the continued growth in personnel. Since, as I've said before, the time honored solution for all problems at INTC is money and people, one would have to conclude that INTC is still having problems.
What might those problems be? Well, it's kind of late in the product cycle to be having design problems so I guess the problems have to do with either producing the NGA chips or getting them out the door. Maybe yields/splits aren't up to par yet?
Anyway, both Otellini and Bryant know that having a great product isn't enough. Maximizing profit is a result of product sales and cost. I suspect that part of management’s cost solution is a reliance on INTC's much vaunted economies of scale, but as AMD continues to take market share that old solution seems more questionable. Trying to retake market share is very different from having it and holding on to it. If INTC thinks they can retake market share from AMD, especially with all the new capacity AMD has coming online, well that's not going to happen, at least not in the short run.
Suffice it to say that INTC's costs relative to AMD's are going to be a major factor in profitability, as the differences between each company’s product become less pronounced. Of course the analysts know this, and hence the bone about something nebulous happening to costs in 07. For now though it appears it's "damn the torpedoes" and "full speed ahead" at INTC.
you...
SONY's XBR line of LCOS HDTCs are temporarily some of the best HDTVs on the market...
me...
Well, I probably should have said currently. Things are changing so fast that It's hard to keep up. However, Toshiba/Canon will be producing a flat panel unit next year with a rumored 100,000:1 contrast ratio that's going to have over 6m CRT like emitters and use less power than current offerings. Originally it was supposed to be out this year, but I expect 08 before volume hits the market. A pre-production model was demoed at CES this year and it knocked everyones sox off. However, I'll probably be buying one of the XBRs when the new models come out later this year.
http://www.engadget.com/2005/09/12/first-toshiba-sed-tvs-coming-in-march-2006/
http://www.toshiba.co.jp/about/press/2006_03/pr0801.htm
you...
Once again, Barrett did not choose Itanium and they rest of your post is too much rambling generalization to comment.
me...
That's not what I said, it looked to me as if this was an Otellini decision that was quickly scrapped.
One of the things that has been a hallmark of INTC's decision making process, even going back to the Grove days was the tendency to throw things at the wall and see what stuck. This was particularly noticeable as pertains to INTC's diversification efforts.
Why INTC ever got into something as remote as LCOS still baffles me. I assume someone said, yeah we can do CMOS, therefore we should be able to outdo TI and come up with something better than DLP. What they really should have been looking at was SONY and TOSHIBA who actually knew what was needed and brought the technology to fruition. Incidentally, SONY's XBR line of LCOS HDTCs are temporarily some of the best HDTVs on the market, but that's another story.
Anyway, that sort of decision making process was carried over into processor design with various groups throwing things at the wall and management choosing what looked best. This worked well when the design teams were truly differentiated. With the advent of idea smerging( my word) and NIH, INTC developed the equivalent of hemophilia due to incestuous idea inbreeding.
To prove that one only has to look at the idiocy of Itanium and netburst. To say INTC lost its way is a gross understatement. Otellini certainly has his job cut out.
you...
The "mistakes" were made mostly during Barrett's reign and Barrett is a science type, and the mistakes were mostly marketing.
me...
Well, I don't believe it, but we actually have something we agree on. Other than the dozy of a mistake he made at the beginning of his reign in selecting the Itanium ISA over X86-64, something that was quickly corrected, his watch has had many fewer of the sorts of incidents that marked Barretts tenure. In fact if NGA turns out to be worthy competitor to AMD's Athlon derivatives he will have accomplished more than I thought possible.
The problem as I see it is that INTC is still basically Andy's company even though things have changed a lot in the last 8 years. What Otellini really needs to do is change INTC into something he can manage. INTC is still way to fat, inefficient and badly in need of a reorg. The problem for Otellini is going to be convincing the company that there is a problem. Currently the attitude seems to be "if it ain't broke don't fix it". The real problem is that no one within INTC seems to realize that INTC is broken. I suspect that only something like the abject failure of NGA would create the conditions that would allow a wholesale house cleaning and repositioning of INTC. Since NGA looks like it will, at a minimum, be a moderate success, I suspect that things will continue on the way they have no matter what Otellini wants.
I could be wrong though and maybe Otellini is just biding his time having figured that the reorg would have to wait until fixing the companies competitive problems was taken care of. Well see, but for now the Jury is still out about Otellini.
you...
Conroe ramp
me...
That's faster than I thought, if true. I guess we'll see, but I'm sure INTC is pushing as hard as possible. We'll probably find out why this week.
you...
At any rate, Intel Israel was founded in 1974, and has been growing steadily for over 30 years. It was started by Dov Frohman, the inventor of the EPROM. Israel has been on the short list of sites that actually rates a fab...
--Alan
me...
I'm confused, I'm well aware that there has been a fab in Israel for quite a while, but are you implying that the Israelis aren't doing more design work than ever before. I seem to remember awhile-ago INTC saying that they were expanding the Israeli design center, a lot. I took that as being a reward for the laptop design work they did that eventually led to Yonah etc. I also assumed that there was more than a little Jewish influence in the design of Woodcrest, Merom and Conroe?
All in all it kind of seemed like a slap in the face for the U.S. based design teams.
you...
Intel Israel is a part of Intel "the company" and has been since at least the early 1980's. Your inability to comprehend this destroys the last small vestiges of credibility you have on the subject of Intel.
me...
Of course I realize that INTC had/has a design center in Israel. There is no way that INTC would have ever farmed out the work given the NIH mania the company has. To do so would have been the supreme sort of embarassment that no INTC CEO could have lived with. The point was that prior to the P3 resurrection by the Israelis they were a very small backwater part of INTC with most of the design work done in the U.S. It was only after the Israelis saved INTC's butt that INTC started increasing the size of the design center in Israel and giving them more important work to do.
you...
What makes you think Nehalem will only be out in 2009, I understand Intel will now have to main and separate design teams so there is a good chance Nehalem will be ready way before 2009, the Nehalem team will have something to prove as many where involved in netburst, the mostly Israli NGA team will be riding high for the next two years, competition even within an organization is a good thing.
Me...
Well, that's one way to look at things. From my point of view, one of the things most damning is that INTC basically had to go outside the company, to Israel, to find a solution to its' P4/netburst mess. To me this is a perfect indication of just how inbreed and stagnant the thinking at INTC has become thanks in no little part to HIH.
Long gone are the adversarial team days under Andy when new ideas flourished. Pretty much I credit that to current INTC management not having a clue as to how Andy used to pull it off, though I never like that management style.
Thought at INTC seems to have become so inbreed that I doubt there will be much original thinking in any solutions the U.S. based teams come up with. Of course the Israelis are so far removed from INTC that they haven't been contaminated by INTC speak yet, so maybe they will again save INTC's butt? Anyway, it seems like a big expense for little gain, but then that's the way things have always been done at INTC. Namely, the overridding philosophy is that all problems bend to enough money and people tossed at a solution.
Have you ever wondered how AMD is able to kick INTC's design ass with 1/5th the R&D budget? Could it be that AMD spends their limited funds more efficiently?
Which gets us to NGA. I'm extremely interested in that product, as it will shed a lot of light on how effective INTC currently is in designing new products. If it turns out that most of the advantage comes from more cache I think you can pretty much write off INTC as a threat to AMD. To me it seems that for the last 5 years or so INTC has been taking half-steps while AMD has been taking 3/4 steps. What I need to find out is whether NGA is just a temporary catch up or whether it represents something more significant. Despite all the contrived reviews so far there’s still a strong odor of dead fish
you...
HP has been very helpful with this type of comparison. For HP's consumer line, they generally offer each model with your choice of an AMD or Intel processor. For several of the notebooks, you can choose an AMD, Dothan or Core Duo processor. Everything else can be configured indentically. Dothan is generally a $100 more than a Turion, Core Duo is $300+.
me...
Yeah, makes you wonder just what kind of discounts/rebates INTC gives to HPQ as compared to say DELL? Could INTC be driving HPQ into AMD's open arms? All that extra AMD capacity coming on line has to be used to build something; Hmmmmm... Maybe...
AMD production driver
One of the things that came out of the CC was the rather emphatic response to questions suggesting that the 58.5% GM was no fluke and could be expected as a standard going forward. I also seem to remember Hector saying that AMD would be working towards a GM of about 60% recently. What I took away from that comment was that above the desired GM AMD would start reducing prices rather than increase profitability.
Meeting this GM goal may well turn out to be the driver for increases in production/capacity. If AMD concentrates too much on the low-end it's going to be difficult to maintain that percentage, without some offsetting high-end contributions. Since the outlook for gains in the business side of things seems to be dismal, in the short term, I wonder just where those offsetting gains might be coming from?
Of course AMD is going to be experiencing some big drops in costs as 300mm and 65nm kick in, but if NGA is going to be taking high-end market share something seems not to add up.
I don't know, but this seems to be just another data point indicating that AMD has plans we're not aware of. Sales and product contribution information should be interesting reading going forward.
Another thing that seemed interesting was the continued percentage drop of international sales in the mix. Perhaps this has had more to do with INTC dumping into those markets?
you...
I just bought one of those dual core 64 bits for my new trading computer, cheap and of amazing quality, the company where I bought it is only reccomending them, and I'm glad he did, saved apparently 400 bucks to compareable intel, from what they say, and it is truly amazing quality. Very impressed. Fast is all I can say.
me...
I've been coveting a new laptop for some time, but as is my style I tend to research things to death and wait forever to get the best price. One thing I've noticed is the huge price disparity between AMD and INTC laptops with similar features. The difference seems to start at about $100 and goes up from there.
Maybe that's why I recently read that AMD now has 38% of the retail laptop market. That probably doesn't include DELL, but that figure is certainly significant since AMD has come from virtually nowhere in the span of a couple of years.
I find it hard to believe that anyone would have expected big gains from AM2 as AMD processors haven't been bandwidth starved for some time and latency isn't that much of an issue. The real question is just what AMD has in mind for all this new bandwidth?
To me AM2 seems to be the ante to play the next game.
you...
What period are you talking about? According to Dirk, AMD was not capacity constrained last quarter.
me...
See my previous post. AMD stated that they were capacity constrained in at least the 2 quarters previous to q106. I suspect product was tight for an additional quarter or two before that.
I've said before, but here goes again; there at least 2 flavors of capacity constraint. One is the kind most people think of; namely they go to BB and can't find a machine with the processor they want. The other kind is the type that keeps OEMs and others from using AMD products because they are unsure once they've committed that AMD will be able to deliver. The second type is by far the most insidious and the resolution of those doubts by AMD is one of the things that's driving the current design wins. It's also one of the primary reasons that even if NGA is a homerun there will be a significant time lag before INTC can do much damage to AMD sales.
you...
since it always makes sense to run fabs at full capacity and since amd was not "capacity constrained", what prevented them from fully utilizing capacity with their "cost advantage" to take more market share.
me...
I take it your referring to the comment Dirk made in the CC? I'm not sure, but I expect that any lost capacity was probably due to planning problems such as AMD having too many server chips when they could have sold more Turions. Since revenues were flat and ASPs were up that would seem to indicate that AMD did sell fewer chips. This would make sense since it appears AMD concentrated solely on the high-end markets, and left the low-end to INTC. On the other side of things AMD did draw down inventory by $50m q/q so who knows? Anyway, I tend to believe, as I've said previously, that this was intended as a message to INTC that AMD didn't want to get into a price war, at least right now.
Speaking of cost advantages again; one thing that doesn't get talked about much is revenue per employee. From the respective company employee counts it looks like it must take 4x to 5x the number of INTC employees to create a processor as AMD needs. Of course all this is relatively unimportant since INTC ends up selling 5x as many processors as AMD making the labor costs much less significant for INTC. Yet INTC still needs to sell those processors for far more than AMD charges, on average, and still makes less per share than AMD does. I don't know but working for INTC must be like working in a rendering factory with fat hanging everywhere. Less costs yet INTC has to charge more and makes less? Something doesn't compute.
This is why it's important for AMD to take the low-end volume, despite it not being all that profitable. Every product that AMD can sell profitably is one less product INTC sells which means one less product INTC has to spread the costs over and one more product AMD can spread its' costs over. Multiply that by millions and now your talking some money.
you...
Not the ONLY thing. That, AND better performance and Pd and, of course, their lower pricing. But now that Intel will have the performance and Pd lead, you can bet some of that market share will come back. Or, do you believe that performance and Pd and pricing don't have that much of an effect? You think people buy AMD b/c of something else?
me...
First of all, I assume by Pd you mean P4, or am I not getting something?
Yes, having the performance lead is a good thing, but look at how long it took for Opteron to get established despite being heads and shoulders above anything INTC had/has. It sounds like you think Conroe, Woodcrest, and Merom will automatically have a high-end advantage over anything AMD has? Besides the fact that it is far from proven that NGA will be a homerun, there are a lot of other variables, such as price, availability and the risks associated with a new product to consider. On the availability side, besides the time lag in getting product to market that INTC will have to deal with, there's the problem that OEMs and the channel get into relationships with suppliers far in advance of product delivery. I think your expecting way too much too fast.
Still, I expect AMD will lose some sales they otherwise would have gotten. Unlike INTC though AMD has other options. I think that, given AMD's cost advantages, new capacity and desire to take market share, AMD will inevitably start competing more vigorously in the low to middle markets. Up to now, with limited capacity, it made a lot of sense for AMD to concentrate its efforts in those areas with the highest ASPs. Especially since there was so little competition at those points. With a more competitive INTC I fully expect AMD to shift gears once again and retake the low-end markets that INTC currently dominates because AMD didn't have the capacity to contest.
Anyway, all this speculation is based on NGA being a home run, anything less and AMD remains competitive in the high-end and expands into the low-middle markets. I particularly like the outlook for AMD's Dual Core 64b Turions. They should cause INTC fits for at least the next 6 months or until Merom arrives.
you...
No way. AMD was forced to build a new fab or be left in the dust forever. 65nm technology is needed now and into the future. In the same light, AMD had better be coming up with the bucks for 45nm soon...
me...
Well that's part of it, but AMD wouldn't have needed Charter or the increases in fab30 and fab36 sizes announced recently if all AMD wanted to do was maintain fab30 capacity. In fact a much smaller fab36 would have provided the same number of units considering there's almost a 4-fold increase in die of similar size in going from 90nm/200mm to 65nm/300mm. You really don't think AMD would have added all that extra capacity without some very concrete plans for the product they will produce do you? Certainly, as conservative/risk averse as Hector is it's hard to imagine such a thing.
you...
Here's another one of your diffused comments. Intel was on a different path (which was a good one, btw) which would have proved competitive had it not been for the Pd. It takes years to switch and you are now seeing that light coming on as well.
me...
Well, I'm sure it looks that way to you, but I wonder how well the P4/Pd would have done if AMD hadn't be severely capacity constrained during most of that period. It's becoming increasing clear that the only thing that kept AMD from huge market gains during the period was a lack of capacity. This was especially true after INTC marketing was forced to rein in its' most nefarious practices.
you...
not capacity constrained -> if we built more it wouldn't sell at current prices...
or said another way: why are we building more fabs???
me...
Well, there's a big difference between being almost capacity constrained and having a capacity glut. That is unless INTC is getting very poor yields out of all those 65nm fabs?
From my point of view it's really rather simple, AMD built fab36 so that it could take market share from INTC. To that end INTC has been more than accommodative having largely squandered the advantages it once had over AMD. No longer does INTC have the huge capacity advantages it used to have, nor are its' production processes any better than AMDs (probably a lot worse). Also INTC no longer has the marketing control it used to have, and over the last 3+ years INTC has constantly proven its' inability to come up with designs that are even competitive with AMD's. Yes, I know just wait for NGA. Well, NGA had better be a home run because anything less and INTC has few options outside of a massive culture change.
I think AMD would love to take more of a bite out of the business markets, and who knows perhaps we will see that happening, but there appears to be plenty of room in other areas such as laptops/dual core for the capacity coming online to be used. In any case, I think AMD is going to have a clear cost advantage that should allow it to take low-end/middle market share if needed.
I'm still dubious about a full-fledged price war breaking out. It’s more likely that we will see both companies trying to take advantage of the others perceived weaknesses. In any case it's going to get a lot more rough and tumble as both companies try to jockey for position.
you...
How many buyers will have qualified the systems for deployment?
me...
Yeah, there are just too many unknowns to say anything much about a product as different as NGA appears to be. INTC certainly could be sand bagging and have lots fo product available, but that's not the way things are usually done. On the other hand INTC is under a lot of pressure, so who knows? Mainly I'm interested in how well INTC's 65nm process is doing. The lack of independent information is deafening. If yields/splits are as bad as some of the rumors floating around that's bound to slow down the ramp.
On the AMD side I sure would like to know what mature yields means. Depending on what your reading that can seem to mean anywhere from 50% to 90%. Also, I would like to know how SIGE is going and something definitive about what it will mean both in terms of yields/splits and speed.
you...
You actually think Q3 will be better when at that point Intel will have a clear performance advantage with their new generation of chips??
me...
How many NGA chips do you think INTC will be ready for sale by q3? There's more to it than INTC just producing the chips, even if they are able to.
you...
That was a curious statement given that AMD depleted an already depleted inventory by another $50 million. No doubt some of the bashers will claim that AMD is writing down the inventory to reflect lower pricing. But I'd be surprised if much of the inventory is carried as packaged product. I suspect most is untested and unpackaged die. Which is valued differently if I am not mistaken.
me...
Actually, inventory is valued at the lower of cost or market. Personally I don't think AMD has that much inventory, and what they have is probably mostly new stuff, with a lot WIP.
As I said, from my point of view that comment was more of a signal from AMD that it didn't want to get into a price war now than a statement about actual capacity. Whether INTC was listening or has other plans is another matter.
Going forward.
Incidentally, a great CC with lots of information and for once good questions from the analysts.
One of the things I found most interesting was the comment by Dirk that AMD was not capacity constrained in q1. I read this to mean that AMD is not yet ready to go head to head with INTC in the pricing area. The best way to look at what AMD has planed for INTC is to think of the way a boa slowly crushes its' meal, rather than a baseball bat to the head. So, I expect q2 to be kind of like q1 with AMD letting INTC have the low-end again and concentrating its' efforts on 300mm, 65nm, and the raft of new products coming in q2/q3.
By q3 though things really start to get interesting as this is the strongest time of the year for demand and AMD will then have all its' ducks lined up. At that time I expect AMD to start exerting increasing pressure on INTC in the low-end of the market as AMD uses its' considerable cost advantages to eviscerate huge hunks of market share from INTC’s hide.
What cost advantages? Well, besides the fact that INTC is a fat pig with way too many employees and a bloated infrastructure, by some time in q3 AMD will be at 300mm and 65nm and getting much better yields/binsplits than INTC. So far AMD has managed to take large hunks of INTC's market share with nothing more potent than 90nm and 200mm and a very restricted capacity. Imagine what happens to INTC's margins when those impediments are removed and INTC can't keep its' fabs full while AMD is running at near capacity in a fixed cost business. All right, perhaps the much better yields/bin splits thing at 300m and 65nm is somewhat of a leap of faith, but I'm not at all convinced that INTC's current 65nm/300mm process is competitive with AMD's 90nm/200mm process.
Personally, by the end of q3, I think INTC will be having a very difficult time trying to compete with AMD in the low-end of the market. In the high-end of the market cost is much less relevant so we might see a flip/flop again in market positioning if NGA is the homerun that the INTC fans think it will be. Under that scenario, the worse case would see AMD again relegated to bottom fishing as INTC reclaimed the high-end. Personally, I find it much more likely that all NGA does is restore a more competitive environment in the high-end which still leaves AMD with its' lower cost structure advantages.
It's not like this is some sort of secret. I'm sure INTC is already feeling the pressure, as contracts need to be signed way in advance. Perhaps we'll get more of an inkling as to what INTC's response will be in the upcoming CC? Right now I don't see how INTC can compete with the huge amount of capacity AMD has coming online combined with AMD's much lower-cost structure, but maybe INTC has a plan?
From AMD's point of view the boa is hungry.
CC view
Well, It's pretty obvious that the dual hobgoblins of "Price War" and "NGA" are going to be haunting AMD for the rest of the year. This view is supported by the rather tepid forecast of q2 given by hector and the boys. Still this prediction needs to be taken in the context of "under promise and over deliver".
It was a pretty good quarter despite the light revenues which can be explained by a couple of things. First as I remember it ASPs went up 7% which means given the lower revenue that AMD must have sold less but higher priced items. This in turn seems to go along with the server price cuts Dirk said were done to stimulate sales. So it looks like AMD probably gained $share, but not necessarily unit share in q1. I would guess that INTC was hell bent on getting rid of low-end inventory and AMD decided rather than fight, just to get out of the way? Another thing supporting this view was the increase in margins. I liked that the boys view this change as permanent.
One other thing supporting the higher margin view in the future is the impact that 300mm will have on q2 and again the effect 65nm will have on H206. These things alone should be enough to steadily grow margins unless INTC goes off the deep end in some sort of kamikaze way.
Over all I was very impressed by the tone and demeanor of the guys in the CC. Nice to see how Derk is coming along with his presentation skills. Anyone that heard him a few years ago can tell he feels much more at ease in these situations now.
To reminisce
Back in the early 60's, a little while after I had bought my first stock, I remember Berkshire Hathaway was trading at the then astronomical price of about $600 per share. Even then it was the most expensive stock on the NYSE. Of course average volume on the NYSE back then was about 60M shares a day and you had to go the library to do stock research, mostly in “Value line” and magazines.
I somewhat naively remember thinking that no stock could be worth $600, boy was I wrong. Besides, who was this guy from Omaha that everyone was talking about? I should have done more research.
Anyone know when q2 ends?
Looking at the calendar it looks like q2 will have 13 weeks, not the 14 weeks variously rumored. June 30th falls on a Saturday and all AMD quarters end on the last Sunday of the month. Since the last Sunday of June falls on the 25th It looks like there are only 13 weeks in q2?
This could be important for options holders as it leaves AMD reporting earnings on about the 12th of July. This means there will be about 7 business days after earnings before options expiration happens. This is similar to what is going to happen this quarter. It gives the Market time to digest the news and probably see what INTC is doing/has done.
you...
> Well, mostly I'm concerned with how the price of the stock has
> done since I first bought some last November(I posted about
> it). Anyway I'm up about $.4/share which is about 30% since
> then, how's INTC been doing?
Are you missing a digit in there?
me...
I assume you are talking about the 40 cents? The SUNW I bought at the same time has done even better. I tried to find the post I made, but poof it's gone.
you...
With the imminent demise of Itanium the future is looking better and better for Cray and the high to ultra-high products it sells.
Obvious troll ignored.
me...
Ok, well let's assume Itanium has a life ahead, who is going to do the design with all the designers in Fort Collins going to work for AMD? Maybe that's going to Israel also?
Forgive the sarcasm, but when INTC starts talking about $10B project plans the hairs on the nape of my neck tend to stand up. Combine that with engineers deserting the ship and the smell of BS is overwhelming. INTC is looking for a way out of the huge pit it has dug as evidenced by the rumors of Japanese buyers. Not that I think anyone is stupid enough to pick up the dead cow, but that surreptitious news release ploy can only be taken as a desperate plea for a buyer.
you...
hope Cray negotiated more leeway in their development
contract for this monster than they did with Red Storm. They
were on the hook for technical difficulties and schedule slips
with Red Storm. Even with Sandia being very generous in
not exercising penalty clauses it still almost bankrupt Cray.
me...
Well, mostly I'm concerned with how the price of the stock has done since I first bought some last November(I posted about it). Anyway I'm up about $.4/share which is about 30% since then, how's INTC been doing?
With the imminent demise of Itanium the future is looking better and better for Cray and the high to ultra-high products it sells. I particularly like the way Cray chose AMD's path over INTC after a very through review of both companies future roadmaps.
Personally, I think Cray's model is going to eventually be the only one standing as high-end machines go the bundled low cost processor farm route. Kind of like a Lilly Tomlin skit "the incredible shrinking mainframe market".
It's gong to be interesting seeing what IBM can come up.
Cray news
http://www.gcn.com/online/vol1_no1/40250-1.html
Cray Inc. of Seattle will supply the system, named Baker. It will run approximately 24,000 2.6 Ghz quad-core Opteron processors made by Advanced Micro Devices Inc.
AMD goes vertical.
http://www.thechannelinsider.com/article2/0,1895,1942080,00.asp
me...
More evidence of just how AMD is maturing into a viable INTC competitor.
you...
Good points. But, BTW, I don't see any white nights on the horizon, the least likely one being something wireless in order to provide a medium for very high bandwidth applications.
me...
Yeah, the whole question of wireless bandwidth is a potential nightmare, which is why I mentioned having the towers closer together and restricting the covered area so that there would be fewer users trying to get at the available wireless bandwidth. Still, there was an article last week, I believe, talking about Google being one of the few companies with the bucks to buy countrywide bandwidth.
Wireless does keep getting better and better, but for bandwidth hogs, there's is no substitute for fiber. However, for some people wireless could be adequate alternative for their needs, which would add a hint of competition. Demand for bandwidth of all sorts is going to do nothing but continue growing as universal wireless communication demands and the number of bandwidth hogging applications continue to grow.
Anyway, the point was that what's needed is more competition. Without more competition these guys are going to squeeze and squeeze us. Already they have floated positions that they're providing a service for the Googles and Yahoos that they should be paying for. Not to mention that customers are already paying for the ability to access Google and Yahoo.
I'm already paying over $100 per month for h/s Internet access and cable TV, that's more than enough. If we let them, these bloodsuckers will drain us dry and further attempt to restrict what we can access to what they're selling. Not a pretty picture.
The PC as a Media Center
It's an idea whose time may never come. Not that there aren't a lot of techies out there trying to get it to work, but those guys are, by definition already way deep into pain and suffering, so they don't count. Just try and get a tuner that can handle 64b QAM and 256b QAM, let alone one that handles the encrypted versions of Qam. Then there are the problems of getting the right antenna for ATSC broadcasts OTA. You have to be a masochist of monumental proportions to go there.
Really though the problem isn't technical, but the usual culprit, greed. All the content providers including the cable COs, the satellite guys, and the telcos aren't satisfied with supplying you a pipe into the Internet, they want to control the content as well. You having a PC based system that bypasses the need to have a STB for time-shifting etc. is anathema to them. The studios and recording companies wholeheartedly support that scheme as it reduces your ability to copy, timeshift, or alter the data sent to your home in any way without paying and paying and paying for the privilege. In the DRM model being pushed we're all going to be helpless droids restricted in our viewing to whatever we can pay for and to whatever they communication guys want to provide.
There is a ray of hope though. That's WI-Max, which has the potential to bust open the monopolies and allow us to access the Internet directly. Why should I have to restrict my viewing to just what the cable/etc. guys want to provide. Why shouldn't I have the right to access a URL that is showing the same movie but for less? And why shouldn't I have the right to copy a television show to a DVD or HD disc for later viewing or retention?
What's needed is for communities to erect the towers or have ISP’s that aren't pushing programming do so. One other possibility is that GOOGLE may opt to do so. This would probably be the best way to go as GOOGLE has the cash to buy the bandwidth needed. Trying to use the unassigned bandwidth would probably be a problem, but if the towers were close enough and the range restricted enough that could also work.
Anyway, if you just want to watch NTSC television and DVDs a media center PC will work, but forget about HD, at least for the time being, unless your OTA reception is very good. If you have to have HDTV for now you're better off going through your cable/etc. provider.
Still you've got that box of remotes and software that's so primitive it's just this side of chiseling in stone. The whole thing is just a mess and liable to stay that way for some time, but the allure is so great that it's amazing what people will put up with. I can hardly imagine what it will be like when they get holographic TV to work.
Just once;
I would like to get in on one of these seemingly forever-repetitive downdrafts. It's hard to be pessimistic about AMD stock, even in the short term, but that's largely because most of us have a closet niceguy bias, that tends to preclude seeing other possibilities.
In hindsight given that AMD usually does some sort of correction between earnings and that AMD had been basing between 39 and about 41+ for quite a while a correction wasn't that farfetched. The size of the correction is what surprised me most, but there were other warning signs. The biggest one should have been the rave reviews the INTC fans awarded the NGA products despite their somewhat distant release. Not that this fawning admiration changed my opinion any, but the mere fact that so many were believers should have raised a huge red flag. Then there was the "price war" hype, the very mention of which, seemed to convince many that a price war was inevitable, despite it making no sense.
Anyway, it still looks like AMD is going to have a great Q and probably the best year ever. I don't know why but these things seem to be getting ignored by the market. If AMD can meet or beat expectations and INTC does as poorly as they have indicated this will go a long way towards breaking the "price war" bubble. Largely because the market will have to ask some questions about what kind of a war was waged in q1, and if INTC declined why was that. The NGA problem will take more time to resolve as all we have to base opinions on currently is some cooked up demo by INTC. This will bear further watching.