Advanced Micro Devices Inc (AMD): INTC is a whore. I know I’ve sa...

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Tuesday, 06/28/2005 2:39:37 PM

Tuesday, June 28, 2005 2:39:37 PM

INTC is a whore.

I know I’ve said this many times before, but the proof just keeps piling up. I’m sure the whore’s whores will just say that this is another “it doesn’t matter” thing, but if you look at all the “it doesn’t matter” things that have occurred over the last 5 to 7 years this one does stand out. Unfortunately, with biases bigger than their brains there’s no way they would ever admit that INTC has ever done anything improper let alone illegal.

Another thing I’ve said consistently is that for a monopoly to work everyone has to be having his or her back scratched. That worked very well for INTC when they had the best product as well as production and capacity, but ever since AMD gained design superiority with the Athlon cracks have been showing and growing. This has been compounded lately by AMD’s evinced superiority in production as well. All that’s missing is production capacity and that will soon go away as an issue. There’s just too much money to be made selling AMD products now for the OEMs to continue ignoring AMD no matter what INTC does. From that point of view the suit is just a reflection of a new reality whole-heartedly supported by OEMs tired of living under INTC’s jackboots.

Right now AMD can do very well with existing capacity by using pricing to curtail demand, but with fab36 the game changes completely. This coercion needs to be stopped now so that product coming out of fab36 will have a market. Given INTC’s dominant position in the market, it would be very difficult for any OEM to compete in the market selling INTC products without INTC’s rebates. So it is unlikely that without some outside force the OEMs would be unable to resist INTC’s arm-twisting by themselves. So far only SUN has made the decision to stop eating at the INTC trough, but they’re in a much different market than the rest of the major OEMs. It’s hard to see some sort of middle ground where the OEMs can remain competitive and yet reduce their INTC dependence without some sort of major change in the rules of the game.

All in all, this suit seems to be the right thing to do now.