Advanced Micro Devices Inc (AMD)

[bobs10]

DARBES

I read the stuff about INTC raising prices on SI. It seems to make perfect sense, from an INTC point of view, since as has been commented on ad nauseum, AMD is capacity limited by only having fab30. This is especially true if INTC sees the current tech lag situation as being short lived.

Under such a scenario, AMD could either keep prices the same or raise them to match INTC. If AMD matches the raised prices then nothing has changed in the duopoly and other factors still determine market share. If AMD chooses to keep prices the same then there is just another factor besides the current tech advantages etc. that comes into play.

Whether AMD chooses to follow INTC pricing will probably depend on how much extra capacity AMD has. I kind of doubt that INTC would be pursuing such a plan if they didn't have a pretty good idea about just how many processors AMD can produce in fab30.

I would guess that AMD will probably follow INTC's price increases with their own, since the other advantages AMD has are probably sufficient to guarantee maxing out fab30 by q2/q3 of next year, even in a slow market. There is another factor to consider though, and that has to be the effect of a price increases on general market demand. Price elasticity could be a factor though I kind of doubt it will be that much.