sgolds, great analysis.
It looks like Intel's response will come in the form of Tejas in early 2005. Certainly the initial versions of Prescott are not likely to have active 64bit capabilities (though they may activate them in conjunction with socket 775 mid-late 2004). That said, I would not be surprised to see some attempt at a FUD64 strategy, i.e. an entirely marketing-based "64bit" that will preserve premium in the consumer market while keeping Itanium safe. SSE3-"64" or something similar. Bottom line: AMD will most likely have time to ramp 90nm before Intel enters the ring.
If intel goes x86-64, it will be AMD64. They already have a proprietary "x86 compatible" instruction set called IPF that they would love to get on desktops. There is no point or advantage in developing their own x86-64 other than killing off AMD. According to the Intel boosters here, Intel won't do that for anti-trust reasons. Not to mention that with a proprietary Yamhill they'd have to wait for software support which would take another year and kill the whole point... 3D-Now had nowhere near the committments that AMD64 has, and for other reasons the comparison is not valid.
Under this scenerio, Intel's opportunity comes before AMD ramps up 65nm/300mm. They have a one year window - 2005, to be exact - to turn on the volume and reduce prices, squeezing AMD in that year.
So, short term, an Intel entry would cause demand for AMD to skyrocket and AMD would be the toast of the town. Medium term, 2005 could be a problem as Intel manufacturing kicks in. AMD would have to tread carefully, once again pulling a rabbit out of the hat or becoming toast (I do hope they get royalties from Intel). Long term, if AMD opens a new 300mm/65nm factory in 2005 for 2006 product, simultaneously with maintaining Dresden for mature process, then it could be a whole new world.
Remember that AMD and IBM will share the same process. IBM would be thrilled to make k8s for AMD until the new fab comes on-line. It will come at a cost, no doubt, but the ASPs will be higher than what AMD has been used to, especially if AMD steals the prestige and innovation premium that Intel has enjoyed. Even at no net profit (NBL-not bloody likely) it would be worth it to keep share and market presence up.
I would expect that the switch to 90nm, possible contracting to IBM, and then new fab at 65nm 300mm will be accompanied by increased committments to the big OEMs. Assured supply in sufficient quanitity is what these guys really need. This is why the HP support seems weak now while AMD is producing in the 1000s. That will change as we produce in the millions...
On the earnings side, the fiscal displine that AMD has learned through the lean years will make it shine in coming better times.
