Advanced Micro Devices Inc (AMD)

[kpf]

wbmw

I think that Intel would benefit the most from keeping IPF higher margin to use it as an incremental ASP lift, rather than completely commoditizing it top to bottom.

We discussed earlier the USP necessary for this strategy (and concluded that we have different opinions on this matter). For now, i wont argue against IPF could have an USP. I wont even argue it would allow to reach a significant part of serverspace and parts of the workstation-segment as well.

Even assuming all that - which is basically your argument allowing higher margins - and the strategy you propose, it would result in relatively low volume (at least for Intel-relations). Say a million per year, or even two or even three, which is fairly optimistic for a high margin strategy.
Problem is, every COTS strategy (like Xeon and Opteron) combining manufacturing volumes of server- and clientspace will yield economies of scale of one order of magnitude higher than IPF. In case of Intel, it could even be two orders of magnitude.
Income from that transferred via R&D from generation to generation from node to node into performance and cost is something very tough to compete against with a low-volume-high margin strategy down the road.

K.