Advanced Micro Devices Inc (AMD)

[chipguy]

To address another argument that I've seen here, whatever AMD will end up paying for IBM to make its chips will be meaningless compared to the value that the increased production and IBM backing will create.

Perhaps you don't realize that IBM Micro is a very expensive
place to get wafers fab'd (and it is still losing loads of
dough, go figure). That is fine if you are an HP or Compaq
getting IBM to make your 50k per year,$2500 PA-8700s and
EV7s that you resell in 6 figure boxes along with a load of
high margin storage, memory, and services.

But AMD has to survive on selling components which means
volume which means the desktop. Selling a few $3500 846
Opterons here and there is nice but the volume won't keep
AMD in business. AMD has to be able to design desktop chips,
fab them via IBM Micro, and sell them at its traditional
well under $100 ASP in order to survive. I don't think that
is going to be very easy at all.