Friday, October 27, 2006

DELL's sub $500 slashes Intel's throat

It's amazing that someone would reach a conclusion that DELL's AMD products hurt AMD. They all forget a simple fact: AMD is ramping up like crazy. Temporary shortages will be relieved by FAB36 doubling capacity. Basically, AMD is selling all it can make, and Intel keeps piling up inventory.

If one looks at Intel's 3Q06 result, mobile is the only thing that kept Intel in business. Intel's 2Q06 desktop+server revenue dropped near 30% from 3Q05, and almost flat from 2Q06, even though Intel was shipping Core2 and Woodcrest. Mobile revenue dropped 4% from 3Q05, but up from 2Q06. Intel is still getting good money and ASP from its mobile business.

Now, imagine DELL flood the market with massive number of Sempron notebooks. Every AMD notebook is at least $200 loss of revenue for Intel (CPU+chipset). 1 million DELL AMD notebooks is a loss of $200 million for Intel. And, we expect DELL to ship about 2 million AMD notebooks.

The whole AMD v. Intel game is a bloody death struggle, whoever has the lower cost will win. AMD can achieve profitability at an ASP of $80. What AMD must do is denying Intel's the oppurtunity to dump its inventory.

The DELL-AMD alliance is a nail on Intel's coffin.

PS: Someone questioned why Intel sticking to Dell is a death trap for Intel, but AMD-DELL alliance is good for AMD. The people asking such questions are typical liberal arts people without the ability to apply logic -- they only know to use analogy. AMD and Intel are at completely different situations, AMD is gaining market share no matter what and Intel is losing market share regardless. It is called the destruction of monopoly. The only option Intel had was to die a quick death or to seek a lower level of survival.

PPS: Some Intelers brought up the Anand busting articles, which have already proven true. Intel claimed 40% performance lead at IDF, I estimated the lead to be around 10%. Intel's have been busted and its fraudulent comparisons of Woodcrest and Opteron have been exposed. There was nothing to disapprove my earlier conclusions. The industry has widely recognized that Intel has become more competitive with its Core2, but it has also recognized that Intel lead is likely to be very short lived. While Intelers cheer on the reported need for AMD to do A1 silicon for K8L, such revisions are the norm. Any delay in K8L merely gives Intel some additional time to breath. Once K8L is out, the game is over for Intel.

23 Comments:

Blogger TheKhalif said...

ALL HAIL THE DUOPOLY!!

9:00 PM, October 27, 2006  
Anonymous Anonymous said...

Yeah, you've already proven yourself full of it:

"INTEL BK in 5 to 7 quarters (Not rated) 17-Aug-06 01:57 pm mark my word folks.

"Expect massive operating loss for Intel in 3Q06."

9:21 PM, October 27, 2006  
Anonymous Anonymous said...

I thought that the XO (see a few threads down) would be the laptop that would keep Intel from selling their laptop chips? Anyways a $500 laptop with a $35 sempron chip will only do one thing, and that is to drive Amd's margins even lower. Meanwhile Dell, is selling $2000 laptops with Intel proc. I can easily see Intel's earnings at 9.8b for Q4. Any predictions Sharikou?

9:38 PM, October 27, 2006  
Anonymous Anonymous said...

You know that you make a full of yourself when you start pulling numbers out your know what right.

9:41 PM, October 27, 2006  
Anonymous Anonymous said...

This is all FUD. Exploding chips, 100 billion dollar company going bankrupt, they can't sell their old products, they can't sell their new products, they can't make enough of their new products to sell, no one will buy their new products, I can go on and on but one thing is for sure and that this is all FUDDDDDDD!!!!!!!!!!!

9:42 PM, October 27, 2006  
Anonymous Anonymous said...

So I guess Intel will be BK even sooner? :D

10:44 PM, October 27, 2006  
Blogger Mikolaj said...

AMD FAB36 capacity can help AMD to achieve additional 7%. That's it.
AMD IS SAYING THAT THEY PRODUCE 55 milion CPUs next year.
We can expect the capacity flood in 2008 when TWO fabs at 65nm will be able to produce 70-80% market needs.
45.000 wspm, 65nm in 18 months.

Imagine - in 2010 at 32/22 nm only one FAB will be required to get 50% of the market!!!

12:20 AM, October 28, 2006  
Anonymous The Sheepshagger said...

"AMD is ramping up like crazy. Temporary shortages will be relieved by FAB36 doubling capacity."

Temporary shortages... indeed.

Temporary shortages relieved by FAB36 doubling capacity... unlikely.

Let's just remember that while FAB36 is ramping, FAB30 will be de-ramping by 40% during same time period for re-tooling. It will then be renamed FAB38 but will not be fully ramped on 65mm approximately Q308 with products from being returned to 100% capacity finally out the door (assuming 90 days from start to finish and a full quarter of partial loadings) sometime in Q408.

Yes... AMD is ramping FAB36 because it has to in this case as the de-ramp of FAB30 will reduce AMD's capacity by ~10k-12k WSPM or 40k-48k WSPY. I still haven't seen you acknowledge this and I'm quite curious as to how you think this will fit into your previously inflated output capacity model that was to enable AMD to supply 50% of the world's demand.

3:32 AM, October 28, 2006  
Anonymous Anonymous said...

Hairsplitting about the loss: each AMD notebook sold is either $200 loss for Intel or a sell to somebody who otherwise would not have bought it (that part is probably negligible, though).

SurJector

3:37 AM, October 28, 2006  
Blogger TheKhalif said...

I thought that the XO (see a few threads down) would be the laptop that would keep Intel from selling their laptop chips? Anyways a $500 laptop with a $35 sempron chip will only do one thing, and that is to drive Amd's margins even lower. Meanwhile Dell, is selling $2000 laptops with Intel proc. I can easily see Intel's earnings at 9.8b for Q4. Any predictions Sharikou?


You guys should either layoff or not remain anonymous. Everyone is allowed their opinion.

Time will tell if he's right.

But as a correction, ALL Dell laptops will use Turion X2, not Sempron.

They will probably use TL50 and TL52. With 1GB RAM and GeForce 6150, it will be Vista ready.

6:24 AM, October 28, 2006  
Anonymous Anonymous said...

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE891A38B%2DF1EF%2D4C6E%2D8DD2%2DAB3CEB747588%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

Intel's overall processor unit market share grew to 76% for three months ended Sept. 30, up from 73% in the prior quarter. AMD's overall share grew to 23%, from 22%.

...

7:13 AM, October 28, 2006  
Anonymous Anonymous said...

Dell sells $499 Intel notebooks, and has for year.

How exactly is AMD different?

9:00 AM, October 28, 2006  
Anonymous Tritosh said...

congrats MR. Anonymous... You can quote!! :D

9:24 AM, October 28, 2006  
Anonymous Anonymous said...

I especially like the part of Shari-kook's statement:

"there is simply no way that Conroe can be faster than the FX60."

which has now morphed into well games are equivalent (when bound by GPU) and overall its ~10% - clearly that's what the above statement means right?

11:34 AM, October 28, 2006  
Blogger enumae said...

Sharikou said...

"Intel claimed 40% performance lead at IDF..."

You love to misquote this.

"The industry has widely recognized that Intel has become more competitive with its Core2, but it has also recognized that Intel lead is likely to be very short lived."

Intel has about 8 months before K8L, totaling about 10 months of having the performance advantage, is that short lived?

If your looking at the last 3 years, then yes, but from what Intel has been saying it won't let that happen again.

We are going to see alot of back and forth in the future, and what is wrong with that?

I have asked this before but got no answer...

What happens if Rev H (K8L) doesn't give AMD at least a 10% advantage?

Please don't answer with a "of course they will", think about it, what happens then?

I am hoping Rev H (K8L) about 20-30% faster, then Intel makes a core about 20-30% faster, its better for all of us, the consumers.

Also like Intel, AMD will be slow to make K8L based architecture 100% of production, or do you think when it gets here thats the end of K8?

If so explain why since K8 is still competitive.

Thanks in advance.

5:59 PM, October 28, 2006  
Blogger Sharikou, Ph. D said...

What happens if Rev H (K8L) doesn't give AMD at least a 10% advantage?

Please don't answer with a "of course they will", think about it, what happens then?


You dude is completely missing the point. K8L is great not because its core improvements, but its scalability. Those SUN boxes will be 32 way machines. Those DELL PE 6950 will be 16 way.

The 4x4 will be 8P. So, AMD got the mid to high end covered.

For the rest of the market, it will be a flood of $100 X2 chips fragging Core 2 duos in the low end, which will be sold at comparable price of $100. The key point is to deny Intel the chance of profiting from Core 2 Duo.

8:22 PM, October 28, 2006  
Anonymous Anonymous said...

Ok by 16 way and 32 way machines I guess you would be talking about 4p and 8p servers then yes Amd does have the advantage here, unfortunaly for them this market accounts for a small percentage of the server market. I'm no economist much less a doctor but the whole everything or nothing idea by flooding the market with $100 X2s sounds really stupid. First of all a comparable X2 to Core2 duo would be what? Lets say we compare an E6300 to an X2 4200 which are both around $180 right now. I just can't see Amd cutting their prices by almost 50%. I know you will probably have something to say about the Intel inventory but as you saw in the last quarter intel is still able to move those chips also. The 4X4....well what can I say about that that hasn't been said before.

9:21 PM, October 28, 2006  
Blogger enumae said...

Sharikou said...

"You dude is completely missing the point."

I will admit that my question was aimed more towards Desktop and Mobile.

I have already come to the conclusion that until Intel incorporates an IMC and CSI the server segment with quad cores will continue to move towards AMD.

I should have specified, Desktop and Mobile.

Same question applied to those segments if you will.

Thanks.

9:26 PM, October 28, 2006  
Blogger Sharikou, Ph. D said...

I should have specified, Desktop and Mobile.


On desktop, there is the elite market for $999 CPUs, about 10,000 customers per quarter, that's covered by 4x4, using the same socket F K8L quad. Then there is the mainstream market. The $150 range. AMD's Rev G will be enough and will be in the same class as Con XE 6800. This is because once Core 2 Duo loses its top dog status (pushed down by K8L 4x4), it will be no more than another ordinary CPU. Furthermore, I expect AMD to produce some very powerful graphics chips specifically suited for Direct Conect Architecture....

As for mobile, AMD's new architecture seems to be very close to K8L, add AMD's Radeon graphics. There is simply no way for Intel to compete. Vista's requirement for 3D graphics will push Intel into the very low end.

10:31 PM, October 28, 2006  
Blogger enumae said...

Sharikou said...

"AMD's Rev G will be enough and will be in the same class as Con XE 6800."

Rev G is just the shrink to 65nm, how will this keep up with Conroe?

They arn't going to raise clock speeds right away, FX series is staying at 90nm until Q3 07, so where does this performance come from.

"There is simply no way for Intel to compete. Vista's requirement for 3D graphics will push Intel into the very low end."

How can you continue to say this?

Intel is more than capable of running Vista.

GMA 950, GMA 3000, or the GMA X3000.

Are you talking about for gaming, if so your talking about another small segment of chipsets, in which a gamer understands that an IGP is not for gaming.

-----------------------------------

I should have specified further...

What happens if Rev H (K8L) Quadcore or Dualcore doesn't give AMD at least a 10% advantage in either the Mobile or Desktop segments, what will happen to AMD?

I am sorry to put you on the spot, but you love to predict Intels failures, whats your ability to predict against an AMD misstep?

11:37 PM, October 28, 2006  
Anonymous Anonymous said...

Sharikou wrote

"AMD's Rev G will be enough and will be in the same class as Con XE 6800."

Keep dreaming. Rev G will be used for mainstream (under 2.6GHz) chips. There will be no clockspeed increases compared to 90nm K8 from Rev G.

So how in the world is that in the 'same class' as an X6800? A 2.8GHz FX-62 already gets 'fragged' by an X6800 (and E6700 and E6600 as well, talk about utter 'fraggage' LOL), how the heck is a 2.0 - 2.6GHz Rev G chip going to compete? Sure, it'll lower costs for AMD, but in pure performance it'll still get 'fragged' by a country mile and then some.

Haha, 'fragged', damn it, I'm addicted to that term now, almost as much as you are! Thanks Doc! LOL

I must say, it sounds a little different when used in the context of 'Intel fragging AMD' doesn't it eh Doc. ;)

6:47 PM, October 29, 2006  
Blogger Sharikou, Ph. D said...

Keep dreaming. Rev G will be used for mainstream (under 2.6GHz) chips. There will be no clockspeed increases compared to 90nm K8 from Rev G.


Dude, you lack the IQ to understand my reasoning. There can only be one high end, which is the K8L 4x4. All others will be mainstream. Con XE6800 may be 5% faster than Rev G, but it will be 60% slower than 4x4 K8L. With K8L 4x4 high above, Con XE 6800 will be just another ordinary chip which doesn't deserve any meaningful premium.

AMD sees this and that's why they created the 4x4 in the first place.

8:05 PM, October 29, 2006  
Anonymous Anonymous said...

You talk as if the X6800 is the *only* chip in the C2D lineup.

Have a look at this chart and see how the entire C2D lineup 'frags' anything AMD has to offer now, and Rev G won't change a thing because it's clocked the same as current X2s.

http://www.hardwarezone.com/articles/view.php?id=2070&cid=2&pg=16

The E6300 'frags' the more expensive X2 4600+, the E6400 'frags' the more expensive X2 5000+, and the E6600 'frags' the entire X2/FX lineup, at 1/2 the price of an FX-62. E6700 and X6800 are just 'luxury' CPUs at this point, as will be 4x4 and Kentsfield upon release.

K8L is not due till Q3 07 and the market will be totally different then (and Intel close to BK according to you LOL), K8L won't be competing against Conroe nor Kentsfield but rather 45nm Yorkfield/Wolfdale chips.

10:00 PM, October 29, 2006  

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