Advanced Micro Devices Inc (AMD)

[bobs10]

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.