Intel Corp (INTC)

[Dan3]

Re: If it is another prescott Intel will do fine and AMD will do great. OTOH, if performance is as expected AMD will be in a world of hurt

I understand what you're saying, and agree with you for the most part.

What might be a little different this time (famous last words?) is that AMD is bringing an unprecedented amount of new capacity on line for next year. Between FAB 36 and the Chartered arrangement, AMD is tripling its current capacity, and it presently holds 16% to 18% of the unit market. Beyond that, AMD's ASPs are barely half those of Intel, so that Intel has nearly 90% of the revenue market while AMD has barely 10%. If Merom is mediocre and if AMD were able to use its new capacity, ASPs could converge, multiplying any relative market share changes.

Intel certainly isn't at risk of going out of business, but there could be a substantial adjustment in the relative valuations of the two companies, with Intel "the company" presently selling for $167 Billion vs. AMD valued at $7 Billion.

If, if, if - it's long been the story of AMD and justifies the 25 fold difference in market valuation when there's a 4 fold difference in sales. But the combination of the nature of currently shipping product and the ramping of two already completed new FABs makes this one of the most interesting "ifs" we've seen in a long time.