Wednesday, October 11, 2006

AMD having serious problem meeting demand

I was checking the stock levels at this site to monitor the supply of Athlon 64 X2 3800+ AM2, I noticed that since it went out of stock about one month ago, the dates for replenishment got pushed back again and again and again. Today, I read INQ's report on AMD shortages. So I did some more exercise to check other AMD CPUs. The result is shocking. Not only AMD is short of X2 3800+, it's short on even single core Athlon64s.

The AM2 3200 has near 3000 on back order. The 3500 has 2000 on back order. The Sempron 3000 stock level is 1. Go check the x2 3800,4200, 4600, 5000, they are all on back order.

AMD seems to have underestimated demand. I hear Hector yelling at FAB36 and Chartered FAB7 folks to push more wafers.

42 Comments:

Anonymous Anonymous said...

This is a rare thing indeed. I'm actually impressed that you ran a story that isn't skewed purely against Intel. Good Job, Sharikou.

8:58 AM, October 11, 2006  
Blogger Mikolaj said...

This one is rather pro-Intel. If you cannot buy X2 and you want a computer. What will you buy?

Intel.

I'm writing from Poland where AMD has the highest marketshare in the world - it's about 45-50% of the market.
What is strange - it is easy to buy any model of AMD you want.
Come here and buy one!

9:14 AM, October 11, 2006  
Blogger Sharikou, Ph. D said...

If you cannot buy X2 and you want a computer. What will you buy?

Intel.


That what I told Intel execs back in 2005. Since AMD can only supply part of the market, Intel can dictate the price on the rest..But Intel morons wanted a price war.

9:19 AM, October 11, 2006  
Anonymous Anonymous said...

Hee Haa Poland Here I come.

need a Sempron

9:24 AM, October 11, 2006  
Anonymous Anonymous said...

1. Do we know if parts are shipping? Just trying to rule out something like the "fab has halted". I don´t have any reason to believe this but would like to feel confident that it isn´t something very, very wrong.

2. If parts are being produced and shipped, then that could bode well for AMD earnings report given that fab capacity continues to climb. How many more chips do you believe AMD (in total, with outsourcing) produced vs. last quarter?

9:37 AM, October 11, 2006  
Anonymous Anonymous said...

Why would AMD drop prices when they already can't meet demand?

Good practice would dictate a price increase to drive demand down until it matches supply and to maximize profit. Why are prices being slashed instead? What are the implications for AMD in the short term? Long term?

9:49 AM, October 11, 2006  
Anonymous Anonymous said...

Yeah, Sharikou, feeding Dell has its disadvantages (and sending them enough stuff for Christmas time).
I think AMD has deliberately lost the battle for pure speed in order to take the lead in marketshare.
And when they have gained that, pammmm K8L and Intel is KO'ed.
I think that shortages will stay unitl 65 nm process is up and running.

10:00 AM, October 11, 2006  
Blogger Sharikou, Ph. D said...

Why would AMD drop prices when they already can't meet demand?


Price drop on Opteron is to clear the way for the release of more powerful ones. AMD is ramping up fast.

10:55 AM, October 11, 2006  
Anonymous Anonymous said...

AMD is ramping up fast.

Clearly not fast enough. Every sales order that they can't fill goes elsewhere. Not a good place to be, ever. Intel made that mistake, and AMD walked in an open door. AMD makes that mistake and...

11:04 AM, October 11, 2006  
Anonymous Anonymous said...

"I think AMD has deliberately lost the battle for pure speed in order to take the lead in marketshare.
And when they have gained that, pammmm K8L and Intel is KO'ed."

I do not see the points. AMD can takes the lead in marketshare does not have to give up "speed". (Even though the recued size of the cache can lead to more CPUs and better yield.

11:08 AM, October 11, 2006  
Blogger Mikolaj said...

The whole situation has one cause: 65nm. AMD has tight supply because FAB36 is or was offline due to 65nm start for last 2-3 months. AMD probably is in the same situation like in 2005 where FAB30 was not able to complete orders.
Dell is getting 90nm output nad is going to get first 65nm.
After that, the short supply should end at once till next Christmas! ;)

11:33 AM, October 11, 2006  
Anonymous Anonymous said...

hbu"Price drop on Opteron is to clear the way for the release of more powerful ones"

Exactly what would be released? K8L? about half a year until that, I doubt AMD has so big stocpile of Opterons to start giving them away so soon. Sure, they are starting to sell 65nm cores in a few months but they are not high-end and there are not many of them.

If you think there are many of them, could you give a rough estimate how many of K8's would be 65nm by the end of this year. While you are at it you can also give some numbers about higher-end 65nm K8's.

11:59 AM, October 11, 2006  
Anonymous Anonymous said...

Funny. When AMD had huge amounts of CPU's in that warehouse you said it was good for them and Intel couldn't produce enoug hof C2D's. Now things are different.

E.g, take this. There are ~9000 CPU's in California and ~6500 coming in ten days. Seems like Intel has no problems with supply.


Also, if AMD can't supply enough CPU's, how can it achieve 40% market share by the end of this year?

12:15 PM, October 11, 2006  
Anonymous Anonymous said...

According to previous blogs, AMD will be able to supply >40% of the market (and this analysis was done BEFORE AMD cut L2 cache on X2's) - if there is a shortage now, are you saying:
A) AMD already has more than 40% odf the market?
B) that AMD now has a yield problem?
C) your past analysis was wrong?

I don't think A and B are true....

12:17 PM, October 11, 2006  
Anonymous Anonymous said...

That's too bad that they're missing potential sales then.

Inventory build up can at least sell the excess later but when you can't meet demand, those sales will go to the competitor or never come back again.

12:46 PM, October 11, 2006  
Anonymous Anonymous said...

http://www.vr-zone.com/?i=4140
Wolfdale [dual core] has 3.5-4.0 and is 57W. Compared to Antares at 2.0-2.9 at 35-89W.

1:16 PM, October 11, 2006  
Anonymous Anonymous said...

So you think AMD can buy Intel now or wait for it to BK and buy it for 1$ per 100? :)
Or should AMD just buy Nvidia and let Intel be?

2:02 PM, October 11, 2006  
Blogger TheKhalif said...

Dell ordered 20 million chips to be sold between now and next year.

I doubt a large number of their other distros could turn over that many.

Dell doesn't even have to market them. They will sell boxes to the tune of $40B+.

4:08 PM, October 11, 2006  
Blogger Bruno Dieter Chan said...

Am just curious... when Intel start producing Conroes they barely could push enough that there was none to be sighted for weeks. That caused consummers to go AMD, not to mention AMD's cheaper price.

Now am not sure what amount of Conroes they are pushing out a month but it can't even be high. So the question is now that AMD chips are back ordered why has no one gone after the Conroes. I mean that ain't that many to begin with but stock seems to be ample when checking out the sites. That leads me to believe that even though AMD chips are highly unavailable does not mean they are not undesireable.

6:53 PM, October 11, 2006  
Anonymous enumae said...

The Khalif said...

"Dell ordered 20 million chips to be sold between now and next year."

Is that over a years time?

"Dell doesn't even have to market them. They will sell boxes to the tune of $40B+."

$40 Billion, that would account for 70% of Dells total revenue, I think our numbers are wrong unless Dell has already gone 70% AMD.

Bruno Dieter Chan said...

"Now am not sure what amount of Conroes they are pushing out a month but it can't even be high."

Well it was 5 Million for 2 months, so about 2.5 Million a month.

If Sharikou is right about Intel producing 40 Million chips a quarter, 2.5 Million would be about 19% of monthly production.

"That leads me to believe that even though AMD chips are highly unavailable does not mean they are not undesireable."

Who said AMD was undesireable?

7:22 PM, October 11, 2006  
Blogger Sharikou, Ph. D said...

Well it was 5 Million for 2 months, so about 2.5 Million a month.

If Sharikou is right about Intel producing 40 Million chips a quarter, 2.5 Million would be about 19% of monthly production.


But Intel spent 5 months to accumulate that 5 million.

7:50 PM, October 11, 2006  
Anonymous Edward said...

"So the question is now that AMD chips are back ordered why has no one gone after the Conroes."

Actually almost every enthusiast who is not a die-hard AMD fan has gone Conroe. The problem is there is not too many of them (enthusiasts) to start with; minus those AMD fans who'd rather wait for K8L and those who just upgraded 6 months ago and do not wish to spend now, you end up much less than the 25% production volume Intel can pump up C2D at.

Athlon 64 X2 is on back order because it's gone mainstream; C2D systems OTOH are still too expensive to do so. If a school wants to buy 1000 new PCs now, the choice most likely won't be slow-and-hot Pentium D's nor expensive C2D's.

7:50 PM, October 11, 2006  
Blogger Sharikou, Ph. D said...

C2D systems OTOH are still too expensive to do so. If a school wants to buy 1000 new PCs now, the choice most likely won't be slow-and-hot Pentium D's nor expensive C2D's.


Actually, before C2D, most people didn't know Pentium is hot and slow crap, they buy GHZ. Now, Intel told everyone that Pentium is crap, and a lot of people went AMD.

7:54 PM, October 11, 2006  
Anonymous Anonymous said...

C2D systems OTOH are still too expensive to do so. If a school wants to buy 1000 new PCs now, the choice most likely won't be slow-and-hot Pentium D's nor expensive C2D's.

Actually, before C2D, most people didn't know Pentium is hot and slow crap, they buy GHZ. Now, Intel told everyone that Pentium is crap, and a lot of people went AMD.


very true

but the way Dell is marketing AMD, it looks like having some vendetta to settle with Intel...

8:49 PM, October 11, 2006  
Blogger Bruno Dieter Chan said...

I guess the true winner of any CPU race is not speed but best choice for price/performance for the general everyday Joe.

Even when Intel wins they still lose. Damn it's the same sad old song for them.

Shareholder - Why the hell is AMD back order up to the ass?!

Intel Rep - Our C2D line kicks their asses.

Shareholder - And this lines my pockets how?

Intel Rep - Our C2D line kicks their asses?

9:33 PM, October 11, 2006  
Anonymous enumae said...

Edward said...

"If a school wants to buy 1000 new PCs now, the choice most likely won't be slow-and-hot Pentium D's nor expensive C2D's."

Actually the 65nm Pentium D may be slow, but they do run quite cool.



Sharikou, Ph. D said...

"But Intel spent 5 months to accumulate that 5 million."

Are you now saying that Conroe is only about 7.5% of Intels production?

40Million / 3Months = 13,333,333 Processors per month.

5Million / 5Months = 1,000,000 Processors per month.

1,000,000*100/13,333,333=7.5%

"Now, Intel told everyone that Pentium is crap, and a lot of people went AMD."

Again for mainstream users (most people who buy a prebuilt system) who look at email and the internet, whats wrong with Pentium D?

Are they going to notice the slight pause when opening IE, like you, probably not.

Also if someone is a power user who is looking to get a new computer now, they already know that Core 2 Duo is better than K8, so they are not going to AMD.

9:42 PM, October 11, 2006  
Blogger Sharikou, Ph. D said...

Again for mainstream users (most people who buy a prebuilt system) who look at email and the internet, whats wrong with Pentium D?


For most people, a Sempron is good enough. But Pentium D is junk because both Intel and AMD said so.

10:45 PM, October 11, 2006  
Blogger N4CR said...

AMD is now mainstream and dell will be sucking supply. Maybe time for another chartered fab(s) (if they exist)?
AMD might be in the poo briefly if they can't supply enough chips for the market. Built so much momentum to only be hit by supply issues...

Actually almost every enthusiast who is not a die-hard AMD fan has gone Conroe.

You need to get out of the miniscule enthusiast world and look elsewhere - real world. Marketing and price rules the real world. Us enthusiasts are a tiny percent or fraction of a percent of the market who goes with the latest and greatest stuff, even though we really don't need it in most cases :)

11:12 PM, October 11, 2006  
Anonymous Anonymous said...

"But Pentium D is junk because both Intel and AMD said so."

It is junk but rather cheap junk. Most people have no ideas what CPU's are good and they are still going by the name. Too bad lots of those are in positions where they dictate large PC buyings

11:40 PM, October 11, 2006  
Anonymous Edward said...

"Actually the 65nm Pentium D may be slow, but they do run quite cool."

Yes, at 89W typical power usage, the 65nm Pentium-D draws more electricity than the 90nm, much faster Athlon X2.

Not to mention the highly clocked FSB of a Pentium-D system consumes even more power than any socket-754/939/AM2 system, which has memory controller built inside the CPU.

The only good thing about Pentium-D is that it's cheap - but unless you only want 820, all other P-D models are mroe expensive than X2 3800.

12:19 AM, October 12, 2006  
Anonymous Edward said...

"Good practice would dictate a price increase to drive demand down until it matches supply and to maximize profit. Why are prices being slashed instead?"

The price drop is scheduled for end of October, around when AMD should start 65nm shipment.

The price drop could mean AMD's 65nm production ramping well, that it wants to clear up inventory of older socket models (as Sharikou said, to prepare for new releases - wouldn't be K8L though).

Or it could mean AMD's managers are idiots that they don't understand the basic of business.

The least probable reason is that AMD's CPUs are not competitive. AMD is selling every chip it produces, more than it ever did before. This happens when its products are competitive.

12:34 AM, October 12, 2006  
Blogger 180 Sharikou said...

This is going to have a big impact on AMD. They will now see a mass defection of channel to Intel. Just like Intel paid the price with their chipset shortage, AMD will feel a market share loss and lose momentum as a result of this inability to supply. Find out why here:
http://sharikou180.blogspot.com/2006/10/dell-sucking-amds-capacity-dry.html

And, I notice Sharikou is not responding to his assertion that AMD would leave 2006 with 40% market share. I'm not surprised because he will yet again be wrong on one of his key predictions. I'm still waiting for Intel to BK in 5-7 quarters. The problem is I will be part of some compost heap before this happens because for the last 2 quarters the number has stayed at 5-7 and unlike Sharikou's prediction, my life-span is not a moving target.

http://sharikou180.blogspot.com/
(A more balanced POV)

2:55 AM, October 12, 2006  
Anonymous Anonymous said...

I noticed last month that AMD cpus were in short supply here in the UK. I couldn't get hold of any X2 3800+ cpus and still cannot. A bit of a pain for my business. But the 4200+ seems in plentiful supply, including the 65W version.

This leads me to the conclusion that Dell and the other major system builders are sucking up everything AMD can produce in the run up to Christmas.

I would guess that AMD has already sold everything it can produce for the next six months, so cash flow is not likely to be a problem. Profit margins will obviously fall due to the price war but as long as AMD has a constant revenue stream they will improve their position in the market and Intel will feel the pinch.

Whilst all the tech heads and enthusiasts are raving about quad core CPU's, mainstream users will not need them or see any benefit from them for a good few years. Vista will probably not make it into the mainstream for at least a year and to be honest XP is a pretty capable operating system that can do everything most users need. In my opinion Vista will not take a major foot hold till 2009. I still fix PC's for customers running 98 and ME. So most users will be more than happy with a 3600+ Sempron for the forceable future.

AMD should concentrate most of its efforts in improving its offerings in the Server market as this is where Intel is trying hardest to regain market share. With Opteron prices about to nose dive AMD has struck a major blow to Intel. Buyers who recently have waited to purchase a Woodcrest Server may actually reconsider when then can save themselves a considerable sum by sticking with a very capable Opteron system. At the very least AMD will force Intel to retaliate with its own price cuts which again will hurt Intels bottom line.

The enthusiast market is miniscule and AMD is right to let Intel take the crown there. AMD have won the battle to become a mainstream CPU vendor, the enthusiast market is mererly the cream on the cake and I have no doubt that AMD will regain its position here sometime in 2007.

Overall I see a shortage of AMD CPU's as a good thing for AMD, we know that they can produce plenty and that yeilds are good so it must a result of high demand for AMD processors. Whilst I dont see Intel going under as a result of AMD's efforts I do see Intel needing to streamline its business further to continue to compete with AMD.

If AMD does manage to get 40% market share by the end of next year then Intel will be in serious trouble. I dont care which side of the fence you stand on. Intel cannot sustain itself and its workforce if it only supplies 60% of the market, it will have to make cutbacks to survive and this could cause a chain reaction. Intel supplies chipsets aswell as CPU's so for almost every CPU that is not sold a chipset is also not sold. It's a long shot but Intel could completely collapse under its own weight!!!

6:46 AM, October 12, 2006  
Anonymous Edward said...

"Just like Intel paid the price with their chipset shortage, AMD will feel a market share loss and lose momentum as a result of this inability to supply."

You do believe what Dr. Otellini told you, that Intel didn't perform well due to chipset shortage? They piled up 4B worth of inventory and there aren't enough chipsets in them?

2:54 PM, October 12, 2006  
Blogger pointer said...

Edward said...

"Just like Intel paid the price with their chipset shortage, AMD will feel a market share loss and lose momentum as a result of this inability to supply."

You do believe what Dr. Otellini told you, that Intel didn't perform well due to chipset shortage? They piled up 4B worth of inventory and there aren't enough chipsets in them?


as much as you calling ppl spreading FUD, you are indeed quite oftenly spreading FUD againt intel. (again, AMD did viral marketing is real, not FUD :))

Inventory is something that can be tracked. We alse saw Intel enable 3rd party chipset vendor (e.g.) during the shortage.

What a lame effort in spreading FUD.

8:15 PM, October 13, 2006  
Anonymous Edward said...

"Inventory is something that can be tracked. We alse saw Intel enable 3rd party chipset vendor (e.g.) during the shortage."

Ah... so they really piled up 4B worth of inventory while having chipset shortage? What were Intel thinking that they keep pumping CPUs without matching number of chipsets? Did they track their inventory at all?

It is hilarious to see you cry FUD when I only raised questions. I mean when you spread FUD you were using pretty definitive terms.

I mean if you have an answer to my question, say it and explain. How did Intel over-produce 4B worth of CPUs without matching chipsets when they could have tracked the inventory? Questions are not FUD, dude. But your crying FUD is itself a FUD, don't you realize that?

9:49 PM, October 13, 2006  
Blogger pointer said...

It is hilarious to see you cry FUD when I only raised questions. I mean when you spread FUD you were using pretty definitive terms

Hello, FUD expert. I have already quoted one proof.

Intel enabled 3rd party chipset vendor such as ATI during the shortage. Whether Intel had planned the production nicely is another question. What i pointed out is that chipset shortage did happen.

Just to re-iterate, You are the one trying to cast doubt, unrelated statement on how intel can pile up such and such. Straight to the point, if there is no such shortage, Intel did not need to spend great effort in this.

Another direct proof is that there was a shrp rise of ATI desktop chipset market share from close to 0 to 20+% (lazy to check the excat number). This is what I call proof. If you can only defend your statement by simply raising doubt, without concrete prrof, you deserve the FUD expert title.

4:43 AM, October 14, 2006  
Anonymous Anonymous said...

"The enthusiast market is miniscule and AMD is right to let Intel take the crown there."

If this is true, why is AMD developing 4x4? You make it souns as AMD had a choice of giving Intel the crown there....

11:58 AM, October 14, 2006  
Anonymous Anonymous said...

"AMD is selling every chip it produces, more than it ever did before. This happens when its products are competitive"

Could you point out a time where this has not been the case and AMD has written off inventory?

This also can happen when products are non-competitive too (Do you have any background in economics?)

12:01 PM, October 14, 2006  
Anonymous Anonymous said...

"If this is true, why is AMD developing 4x4?"

Marketing. Why do you think Intel and AMD produce their fastest chips when they make less than 0.2% of total sales?

12:56 PM, October 15, 2006  
Anonymous Edward said...

"Could you point out a time where this has not been the case and AMD has written off inventory?"

What has not been the case? AMD's inventory has increased from time to time, only now that it is ramping production while the inventory is descreasing.

Does that has anything to do with writing off inventory? Where's your logic?

"This also can happen when products are non-competitive too (Do you have any background in economics?)"

Only when 1) production is decreasing, 2) selling price is lower than its competitors. Thus AMD chips are still more competitive than 80% of Intel ones (75% netburst plus 5% low-end Core 2).

2:33 PM, October 17, 2006  
Anonymous Anonymous said...

"Thus AMD chips are still more competitive than 80% of Intel ones (75% netburst plus 5% low-end Core 2)."

I'm amazed at how short sighted people are with regard to desktop - this is a continually decreasing segment in terms of both units and revenue (just look at the Q3 Intel #'s), yet these are the only production #'s people quote ("95% of Intel's inventory is crap", "80% of Intel's production is Netburst"...) and for some reason to not factor in mobile production and revenue...

Folks must realize by now this was the main reason for AMD buying ATI, no? (mobile platforms anyone? As an enthusiast integrated GPU/CPU sounds cool but does 75% of the buying public really need this? coprocessors?)

So it is 75% of ~40% (don't know the exact #) which is ~30% aggregate which is not competitive....and that # will go to <10% as P4 gets phase out over the next 2-3 quarters (I think EOL was Q2'07?).

You and Shari-kook both seem to think everything is desktop. Which is reason # 2305 why Sharikou "advises" high level executives instead of being one.

11:22 PM, October 17, 2006  

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