Decent article about Intel and AMD.

[Snoop]

Interesting (ripped from Fool.com)
Im sure some of you all will think its a little biased, but he has some very valid points.
Discuss amongst yourselves.....

 

[ToBeMe]

<< its a little biased >>


LOL! And that McVeigh guy is just A Little Dead!

Seriously, if the guy had any facts to support anything........I suppose it's &quot;possible&quot; of course, but at this point, it's all based upon assumptions! The PIV is sucking in sales, but the PIII's are moving above expected demand much to their dismay.......I seriously doubt they're hurting as much as some would like to think. AMD is DEFINATELY cutting at them, and that's cool, but the difference is only that Intel was used to making money hand over fist........now they're just making less.....but still making! Actually I'm more concerned for AMD........these low prices must be cutting into their R&amp;D budget.........the money has to come from somewhere.......and that could hurt long term. GREAT for us though!

 

[Snoop]

<< Seriously, if the guy had any facts to support anything........I suppose it's &quot;possible&quot; of course, but at this point, it's all based upon assumptions! >>


These are the Facts he is alluding to.

 

[Flat]

Great article, it is only biased from a factual, economic perspective. Imagine the outlook for poor apple with their POS Motorola chips, wow

Steve Jobs: LOOK WE have the GeFroce 3 three days before PCs hahhah!
Intelligent Mac User: Yipee now we can play... wait we dont have any games, and oh yhea lightwave eats it too,Steve
Steve Jobs* ignoring comment: Look! We also have a 733 G4! With alitvec *cough SSE cough* we can smoke a Pentium II 500!
*at this point steve jobs screws some more of his friends, and runs away to have *$# sex with Bill Gates

Steve Jobs, oh why must you be such a complete dumbass idiot, get with the picture.

 

[Flat]

Great article, it is only biased from a factual, economic perspective. Imagine the outlook for poor apple with their POS Motorola chips, wow

Steve Jobs: LOOK WE have the GeFroce 3 three days before PCs hahhah!
Intelligent Mac User: Yipee now we can play... wait we dont have any games, and oh yhea lightwave eats it too,Steve
Steve Jobs* ignoring comment: Look! We also have a 733 G4! With alitvec *cough SSE cough* we can smoke a Pentium II 500!
*at this point steve jobs screws some more of his friends, and runs away to have *$# sex with Bill Gates

Steve Jobs, oh why must you be such a complete dumbass idiot, get with the picture.

 

[Flat]

Great article, it is only biased from a factual, economic perspective. Imagine the outlook for poor apple with their POS Motorola chips, wow

Steve Jobs: LOOK WE have the GeFroce 3 three days before PCs hahhah!
Intelligent Mac User: Yipee now we can play... wait we dont have any games, and oh yhea lightwave eats it too,Steve
Steve Jobs* ignoring comment: Look! We also have a 733 G4! With alitvec *cough SSE cough* we can smoke a Pentium II 500!
*at this point steve jobs screws some more of his friends, and runs away to have *$# sex with Bill Gates

Steve Jobs, oh why must you be such a complete dumbass idiot, get with the picture.

 

[Flat]

Great article, it is only biased from a factual, economic perspective. Imagine the outlook for poor apple with their POS Motorola chips, wow

Steve Jobs: LOOK WE have the GeFroce 3 three days before PCs hahhah!
Intelligent Mac User: Yipee now we can play... wait we dont have any games, and oh yhea lightwave eats it too,Steve
Steve Jobs* ignoring comment: Look! We also have a 733 G4! With alitvec *cough SSE cough* we can smoke a Pentium II 500!
*at this point steve jobs screws some more of his friends, and runs away to have *$# sex with Bill Gates

Steve Jobs, oh why must you be such a complete dumbass idiot, get with the picture.

 

[ToBeMe]

^^^^SUPER NEF???????????????^^^^

Now THAT was a good read!! Bad thing is......if the predictions are correct, like I said above, it will hurt Intel.....but it will also hurt AMD if this is true and AMD runs on a much tighter budget as far as margins &amp; R&amp;D go......

You're making it sound as if I'm sticking up for Intel.......don't make this into that! I own both......always have, always will as long as they're around anyway! LOL!

Intel sucks without competition from AMD.......and AMD would suck without Intel.......like it or not, that's a fact WE need both of them!!

 

[Flat]

uhh wtf a quad post???

 

[ST4RCUTTER]

Yeah, I'd say he's painting a bit of a rosier picture for AMD that even I had anticipated, and I'm an AMD stockholder too! I'll see what happens on July 12th when AMD announces positive earnings again...we'll see how the market responds to that.

 

[TuffGuy]

amd stock has dropped lower than intel stock the past few weeks. even with the announcement of palomino and the laptops.

needless to say, both intel and amd are stuck in the same boat. amd started out with low prices to gain marketshare. intel lowered their prices to remain competitive. now they both have similar prices, but intel still has a greater marketshare than amd.

 

[grant2]

if this guy is right, and it sounds like he knows his stuff, then AMD has everything to gain &amp; nothing to lose.

I'm telling my mom to buy AMD

 

[Degenerate]

na, too biased



<< If Intel does not find some way to slow down AMD by the end of the year, then AMD is just going to pass Intel by in performance in 2002 when AMD begins shipping their own 2.0 GHz and faster K7 parts. >>



if this dude thinks Athlons are loosing against P4 , then later on, as P4 can be clocked faster, wouldn't the gap grow?

 

[Midnight Rambler]

I wouldn't tell my worst enemy to buy stock based on some Internet article. Especially one so biased and full of holes. I'm shocked The Fool printed that article, as I am about 99% certain of who the author is, and he is a major troll in their Forums.

First, his so-called assessment of cash is way off. Even if half of what he assumes (and you know what happens when you assume ...) is correct, all Intel would have to do is put construction on hold, and that would free up a &quot;measly&quot; $8Billion.

Second, he questions whether there might be a problem in their capital construction program. Do you know how many professional analysts have made this same mistake so far this year, only to be later proven wrong and made to look like idiots in the process? Every month this topic gets brought up by Wall Street, and it gets shot right down again. Yes, Intel has delayed a fab in Ireland, and also a fab in Colorado that is exclusively for DSP production, but this info is not news, it was announced many months ago and is not part of their 2001 cap. spending program. Even the top-rated semi analyst, Jon Joseph at SSB, made this mistake of questioning their spending program. Not only did Intel take exception, they really put the hammer down on him. Barrett dissed him no less than three times at Comdex, and a &quot;certain other person&quot; at Intel contacted Joseph as well. While I have no idea of what was said exactly, I do know that J. Joseph quickly wrote a retraction of his entire article, and I have NEVER seen a WS analyst do that before. Methinks he got a call from Andy ... (and so does my broker, who is a V.P. at SSB).

Finally, he also questions 0.13 yields. Now my source is only a lowly mfg. engineer, but from what I have heard out of Oregon, 0.13 is going quite well. And considering the slew of products coming very soon (and some may already be shipping?) based on 0.13, I don't doubt it. Perhaps 'Wingz could further update us (wishful thinking) .

But bottomline, anyone who thinks AMD is immune to the economic conditions/problems being experienced by EVERY technology company in existence, worldwide, is totally full of it (and themselves). This is not an economic slowdown where companies and consumers buy less, or buy the least expensive option, this is a slowdown where buying is halted. Period.


<< Actually I'm more concerned for AMD........these low prices must be cutting into their R&amp;D budget.........the money has to come from somewhere.......and that could hurt long term. >>

Now that is one of the wisest things I've seen posted here. Whilst all the pro-AMD/anti-Intel trolls are wallowing in glee over the current cheap CPU pricing, they obviously have given zero thought to the long term impact this will have on the industry. And it's no so much that reduced profit margins will cut in to either company's R&amp;D budget, it's that no company will be willing to spend billions of $'s on R&amp;D for a commodity product. If a company cannot get a good return on its R&amp;D investment, then it will cut/cease the R&amp;D. And no commodity product can ever produce the kind of profits needed to offset the R&amp;D costs to bring a new CPU to market. I'm only guessing, but I'd peg the cost of R&amp;D for a new CPU to be at least several billion $'s. Add a couple billion more if a new fab or changes to an existing fab are needed to produce the CPU.

When the video card in a system costs 2-3X as much as the CPU, we have a real problem. And we're already there ...

 

[Snoop]

<< First, his so-called assessment of cash is way off. Even if half of what he assumes (and you know what happens when you assume ...) is correct, all Intel would have to do is put construction on hold, and that would free up a &quot;measly&quot; $8Billion. >>



If thats all intel had to do to weather this downturn in the economy then how come according to this articleintel is going to be cutting 5000 jobs? &quot;Barrett told London reporters Wednesday that weaker sales have meant trouble for Intel's communications equipment division. Intel halted production of routers and communications switches earlier in the week as part of Intel's effort to cut 5,000 jobs, say press reports.&quot; Maybe their just doing this in an effort to save a couple &quot;measly&quot; million.





<< << Actually I'm more concerned for AMD........these low prices must be cutting into their R&amp;D budget.........the money has to come from somewhere.......and that could hurt long term. >>
Now that is one of the wisest things I've seen posted here. >>


If that is &quot;wise&quot; please explain how AMD is both Cash flow positive as well as earnings positive while Intel is cutting jobs and halting several of their operations in order to remain in the black? To me it seems that although both companies could be flourishing in a better economy, Intel is having the worst of it in this down period.

 

[Wingznut]

Intel is cutting 5000 jobs, through attrition and relocation, not through layoffs. Basically, the people that leave (retire or whatever), Intel won't rehire to fill their job. They will either cut that job, or relocate someone else, cutting that job. And actually, in some areas Intel is still hiring.

Sorry Midnight, I can't yak about stuff like that. No matter how well the process is coming along, I simply can't talk about it. Even if it's exceeding initial expectations, I simply have to keep it to myself.

 

[Midnight Rambler]

Snoop, you took my comments totally out of their context.

As for my comment about Intel only having to cut cap. spending in order to free up cash, that was only to address the poster's supposition that Intel was burning up its cash reserve. It has nothing to do with the overall economic condition. In fact, Intel's mantra is that they will &quot;spend their way out of any economic recession&quot; - meaning that while other companies have no money to spend on cap. build upduring a downturn, Intel will rely on its cash reserves to take advantage of the situation and increase its capacity as well as improve its processes (ie. move to 0.13 &amp; 300mm wafers). Thus they will be better positioned once the recession ends.


<< << << Actually I'm more concerned for AMD........these low prices must be cutting into their R&amp;D budget.........the money has to come from somewhere.......and that could hurt long term. >>
Now that is one of the wisest things I've seen posted here. >>


If that is &quot;wise&quot; please explain how AMD is both Cash flow positive as well as earnings positive while Intel is cutting jobs and halting several of their operations in order to remain in the black? To me it seems that although both companies could be flourishing in a better economy, Intel is having the worst of it in this down period. >>


Again you have taken my point out of context. Did you not read this part:

<< Whilst all the pro-AMD/anti-Intel trolls are wallowing in glee over the current cheap CPU pricing, they obviously have given zero thought to the long term impact this will have on the industry. And it's no so much that reduced profit margins will cut in to either company's R&amp;D budget, it's that no company will be willing to spend billions of $'s on R&amp;D for a commodity product. If a company cannot get a good return on its R&amp;D investment, then it will cut/cease the R&amp;D. And no commodity product can ever produce the kind of profits needed to offset the R&amp;D costs to bring a new CPU to market. I'm only guessing, but I'd peg the cost of R&amp;D for a new CPU to be at least several billion $'s. Add a couple billion more if a new fab or changes to an existing fab are needed to produce the CPU.

When the video card in a system costs 2-3X as much as the CPU, we have a real problem. And we're already there ... >>


If you do not understand the underlying consequences I don't know what to tell you. But it certainly doesn't have anything to do with cash flow, employee hiring or firing, etc.


And like 'Wingz said, that 5000 worker cutback stuff is old news ... it's so old, IIRC, Intel had Moses do the press release on it.


PS - 'Wingz, you said just enough!

 

[Snoop]

<< As for my comment about Intel only having to cut cap. spending in order to free up cash, that was only to address the poster's supposition that Intel was burning up its cash reserve. It has nothing to do with the overall economic condition. >>


I am not taking you out of context. You asserted that all Intel had to do was sell off some of their capitol assets, or cut their research and development budget to relieve their cash flow problems, I stated that if that was true, why would Intel &quot;halt production of routers and communications switches earlier in the week.&quot; (that is the week of July 17, 2001, which is not old news)
Further, IMO, the mantra as you called it, of R&amp;Ding their way out of this tech recession, is not a strategy, but a necessity. They have no other choice. As hard as you find it to believe, Intel has lost market share to one of its competitors. They cannot demand outragous prices for their chips anymore thus reducing their margins, recession or no recession. Intel?s business model must streamline, and at this point the ONLY way they can do this is through reducing the size of their processes and cutting other fixed costs and in turn, substantially reducing cash flows.



<< << Whilst all the pro-AMD/anti-Intel trolls are wallowing in glee over the current cheap CPU pricing, they obviously have given zero thought to the long term impact this will have on the industry. And it's no so much that reduced profit margins will cut in to either company's R&amp;D budget, it's that no company will be willing to spend billions of $'s on R&amp;D for a commodity product. If a company cannot get a good return on its R&amp;D investment, then it will cut/cease the R&amp;D. And no commodity product can ever produce the kind of profits needed to offset the R&amp;D costs to bring a new CPU to market. I'm only guessing, but I'd peg the cost of R&amp;D for a new CPU to be at least several billion $'s. Add a couple billion more if a new fab or changes to an existing fab are needed to produce the CPU.
If you do not understand the underlying consequences I don't know what to tell you. But it certainly doesn't have anything to do with cash flow, employee hiring or firing, etc. >>


IMO, this theory is wrong. In an industry (PC microprocessor) with just two major players, competition is the ONLY thing that will lead to innovation. (And, at this point, this &quot;commodity&quot; is helping AMD toward their best earnings 1999-2001 in their history, while intel is suffering.) IE, in a monopoly (such as Intel has had in the past), companies usually slow innovation, bloat prices and stifle competition.
If you do not believe me just think about this: How could a company 1/40(pure speculation) the size of Intel produce a chip that has competitive processing power, is cheaper to make, and do this with nowhere near the amount of money for &quot;R&amp;D,&quot; Fabs, or engineers?

 

[ST4RCUTTER]

&quot;When the video card in a system costs 2-3X as much as the CPU, we have a real problem. And we're already there ...&quot;

Why is that? Think about it...what are you buying when you purchase a video card? How bout a CPU? How much R/D goes into a top of the line video card like the GF3? How much more in materials and processing is involved with such a complex piece of hardware when compared to a CPU about 1/2&quot; square? I'm not saying that making a CPU is an easy task by any means, but most of the processes involved in making CPU's today have been around for the last 5-10 years and companies such as Intel and AMD are getting better and better at making the most of their silicon. We will continue to make chips smaller, cheaper and faster. There's a word for that...it's called progress.

 

[Adul]

ST4RCUTTER

Realize cpus do a lot more then graphics cards. Also the biggest expense of the video card is the memory itself. The Graphics chip sell for a lot less then a CPU from intel or AMD will ever sell for. yes Graphics card are complex, but there is far more R&amp;D spent on CPU because they are general Processing units.

All graphics cards do is graphics. It specialized to that area. They have a lot less to worry about then intel or AMD.

 

[ST4RCUTTER]

Adul,

I'm not talking about the GPU, I'm talking about the finished product. When you buy a $300+ Gforce 3 are you buying the GPU only? Not likely. You're paying for the finished product and all the processes that go into fabricating such a device. The range of materials involved with graphics cards far exceeds that of CPUs, and the manufacturing process of the CPU lends itself to mass production far more readily.


Oh sure, change your post on me!

 

[Vrangel]

All this 0.13 and stuff is a hype based approach that worked in a bull market of the nineties.
In a secular bear market its only good for a bull trap.

Value approach is more likely to make money these days.
Lets look at it:

INTC, market cap $185B, P/E 23.
AMD , market cap $8B, P/E 9.

AMD projected CPU market share by year end: 30%. And yet INTC market cap is 22 times bigger.
Please help me to spot a bargain here...

 

[Wingznut]

&quot;In an industry (PC microprocessor) with just two major players, competition is the ONLY thing that will lead to innovation.&quot;

I don't really agree with that. If there were no innovation, there would be no reason for people to buy new PC's. So, people would buy one, and then stick with it for a long, long time with no reason to replace it.

&quot;but most of the processes involved in making CPU's today have been around for the last 5-10 years and companies such as Intel and AMD are getting better and better at making the most of their silicon.&quot;

Yes and no. While some things the companies are getting better at, the &quot;hurdles&quot; that need to be overcome to reach higher speeds/smaller processes are much more difficult and complex. Some people try to compare the switch from .25 to .18 with the current switch to .13um. And it's not really a fair comparison, because many things are much more complex.

I don't think there's any way you can say designing/manufacturing a GPU is any more challenging than making a CPU. I tend to think there's many more variables in a CPU, because it's designed to do so many more things.

 

[ST4RCUTTER]

I don't really agree with that. If there were no innovation, there would be no reason for people to buy new PC's. So, people would buy one, and then stick with it for a long, long time with no reason to replace it.

That argument would hold true if we were still running DOS 6.0 and playing games like Doom II. It was the migration to graphical user interfaces that helped in the push for faster CPU's. If Intel was the only company making CPU's and there was no software to demand more Mhz from the hardware I can easily imagine that we would not be where we are today. Competition has always been a good thing.


&quot;...but most of the processes involved in making CPU's today have been around for the last 5-10 years and companies such as Intel and AMD are getting better and better at making the most of their silicon.&quot;

Yes and no. While some things the companies are getting better at, the &quot;hurdles&quot; that need to be overcome to reach higher speeds/smaller processes are much more difficult and complex. Some people try to compare the switch from .25 to .18 with the current switch to .13um. And it's not really a fair comparison, because many things are much more complex.

I said most of the processes involved have been around for many years. Going from a .25 or .18 process to a .13 requires new litho equipment, but the process is still the same. Using phase shift masking, SIO or copper as apposed to aluminum is a true change in the process. To be honest, other than the frequency of the laser, and the use of copper over aluminum, very little has changed in the manufacturing of CPUs in many years. I suspect other than the frequency of the lasers used, very little will change until we have reached the limits of silicon.


I don't think there's any way you can say designing/manufacturing a GPU is any more challenging than making a CPU. I tend to think there's many more variables in a CPU, because it's designed to do so many more things.

I never said a GPU was more challenging. It's the assembly of the finished product (graphic card) that's more challenging, and costly. The manufacturing of CPU's lends itself to mass production moreso than graphics cards. Try getting 100 graphic cards on a die...oh wait...you see my point. Not that I'm saying making CPU's is easy...

 

[grant2]

Whilst all the pro-AMD/anti-Intel trolls are wallowing in glee over the current cheap CPU pricing, they obviously have given zero thought to the long term impact this will have on the industry. And it's no so much that reduced profit margins will cut in to either company's R&amp;D budget, it's that no company will be willing to spend billions of $'s on R&amp;D for a commodity product.

So how do you explain AMD being able to R&amp;D the best (arguably) consumer processor on the market despite their miniscule market share and consistently lower CPU prices?

Do you REALLY think that $985 profit that intel made on their $1,000 processors ALL flowed back into R&amp;D and not shareholder's pockets &amp; dicey acquisitions?