me...
Actually in a two company system the term price war means much less than in a more competitive environment. There are lots of restrictions on both AMD and INTC that keep both from getting into a bare knuckles, winner take all sort of knock down drag-out pricing fight. In AMD's case lower prices are the inducements AMD can give to get the market to absorb the extra production that will come out of fab36. There's no sense in AMD lowering prices anymore than scheduled production requires as there are definite limits on consumer demand and what the OEM's are willing to do. It takes time to build up the infrastructure that can accept the extra product, but AMD has been capacity constrained for some time so it already has demand for some of the extra capacity. This extra demand, not based on pricing but superior product, will allow AMD to lower prices and keep the expansion of fab36 rolling on. Of course NGA could put a dent in those plans, but for a couple more quarters there is little to fear from INTC in the from of price retaliation unless AMD starts taking huge hunks of market share.
Yes, so far most of AMD's growth hasn't hurt INTC too much since it has come out of additional market demand. If the market does start to slow down though this is one thing that could cause a wounded INTC to resort to pricing in an attempt to maintain market share. For the time being though the rational thing for INTC to do is to accept the losses in market share while concentrating on improving demand for its' product.
I don't think AMD ever said it plans to shut down fab30. I've said it before, but I believe fab30 could be converted to 300mm. At the time fab30 was being designed 300mm requirements were well understood and had fab30 been built 6 months later it is highly likely that it would have been 300mm. There's no reason to believe that the necessary infrastructure for 300mm wasn't put into place. Things like higher ceilings for the conveyers and additional power etc. In any case I think Hector has other plans for fab30 besides producing state of the art processors. If I'm right these plans should keep fab30 in use for some time before a refurb such as the one INTC did in Arizona becomes necessary. One thing to remember is that AMD has already more than doubled production capacity by going to a slightly larger fab and 300mm. 65nm in fab36 will again double capacity so there's not much concern about AMD being unable to supply the markets with or without Charter's production. Currently fab30 is producing at about 12m processors a quarter which implies that fab36 alone could be able to produce about 60 m units a quarter when completely fleshed out. Of course that assumes no increase in die size so probably 40m is a better estimate. Still that's 160m processors a year. I doubt if AMD will be producing at that level for quite a while, at least INTC had better be hoping so.
As far as the law suit goes just making the charges has increased AMD awareness and resulted in INTC calling off its' marketing dogs. So, from an AMD point of view the lawsuit has already achieved most of its' goals.
It's hard to say how the market will value INTC, but I would tend to agree that the market has taken more than a pound of flesh from INTC's hide. As you say there is room for both companies, and I expect both companies to expand out of the PC box as time goes on. For the time being though I expect AMD to continue making life miserable for INTC.
The move to 45nm will probably go the way the move to 180nm, 130nm, 90nm and 65nm has gone. INTC will be first out of the shoot and pick up the tab for being first while AMD follows along about a year later. With all the fabs INTC has it can afford to be on the bleeding edge AMD can't, currently.
Yes NGA is a big unknown, it very well could turn the tables back in INTC's favor, but realistically I think things have progressed too far for the genie to ever be put back into the bottle. However, given my emphasis on bob making money rather than INTC or AMD I'm relatively sure bob will do just fine. In fact bob has done great this year with AMD already up 31%.
Which brings us back to what this board is all about. No matter what your and the other INTC fans feelings are about AMD you have to admit that all of you have missed a golden opportunity to pad you bank accounts. Biases are terrible things for investors to have and fighting the market has proven over and over to be very costly. Certainly considering the amount of time you and your cohorts have spent on this board it seems a shame that you haven't been rewarded in some small way for your efforts.
AI
