Advanced Micro Devices Inc (AMD)

[yourbankruptcy]

kpf, Conclusion: Intels cost advantages from 90nm/300mm will probably be used to lower prices (to spur demand, prevent from significant loss of market shares and to keep the fab utilized). Talking about 5% sequentially in every quarter for the next six quarters. For clarification, I am not talking about waterfalls, but net ASP declines.

I disagree, because AMD is actually decresing the volume output. The 90 nm is stll 6 months away and I don't think AMD can ship more than 8 million chips until Q105 at the earliest. In this environment Intel has no reason to engage in any price wars, except in Xeon DP and MP space.

That actually prompt you to adjust your conclusions, I think.

AMD was selling 1-2 million chips per quarter in the $40-$50 price range. Let do the primitive math.

Suppose 8 million chips with ASP $65, from which 4 million have ASP $50. Then let cut off those 4 million and see. Remaining 4 million have ASP of $80. Then lets add 1 million of chips with ASP $200. We get $104. Goes up pretty fast.