AMD Seems Alone in its Price War

“Banc of America affirms caution on AMD, and cuts their tgt to $14 from $15 and estimates. The firm's channel checks indicate that AMD is preparing for another round of price cuts on Apr 9th, in an effort to 1) bolster flagging demand for its products and 2) preempt Intel's price cuts scheduled for Apr 22nd. These price cuts, which they believe will be across of several AMD's desktop products (including Semprons, Athlon X2s), and will range between 26-42%. Regarding Intel (INTC), while they think the price cuts will put some pressure on Intel's low-end offerings, they expect blended pricing for Intel's desktop processors to trend flat with higher volumes in the premium Core 2 Duo segment offsetting price erosion in lower end processors; the stability in notebook and server pricing (no price cuts) should serve as an additional mitigating factor.”

Once again, market researchers confirm that AMD is in a price war with Intel’s low-end products only. Meanwhile Intel continues to milk the high-end cow completely unchallenged offsetting margin erosion from its price-skirmish with AMD. The Centrino brand continues to sell while Xeon continues to take back market share from AMD. Soon AMD’s OLPC plan can come into fruition when then have to give away their X2’s for free just to clear inventory. With Barcelona’s limited volume we can expect AMD to bleed red until they can volume produce at 45nm – 2009 to be more precise.

1 comment:

Anonymous said...

article on INQ says AMD is double stuffing... and they're not talking about turkeys.