Intel drops 2.5% marketshare to AMD

[zsdersw]

Originally posted by: Idontcare
Its not really meaningless is it? It provides a valid upper-boundary estimate of what AMD's marketshare could be.

It's meaningless for the same reason it's meaningless that the sun will die in about 5 billion years; how do or will we get there?

 

[Idontcare]

Originally posted by: zsdersw

Originally posted by: Idontcare
Its not really meaningless is it? It provides a valid upper-boundary estimate of what AMD's marketshare could be.

It's meaningless for the same reason it's meaningless that the sun will die in about 5 billion years; how do or will we get there?

I think you are conflating the position of "it's meaningless to me" (as in you personally) versus the position of "it's meaningless to everyone and anyone"...

I accept your position that fab capacity calcs and the lifetime of stellar objects are equally meaningless boundary conditions to you, but that doesn't mean they are meaningless values to fab capacity planners and astrophysicists world wide.

Capacity calculations and establishing upper limits (boundary conditions) are intrinsic to the initial phases of determining plausible ROI opportunities for any feasibility study relating to fab capacity layouts. I've seen plenty in my time and I haven't seen a one done without this metric of ROI roughly hashed out as a pretext to justification of capital expenditures.

Likewise knowing basic fundamental physics involved in fusion reactions combined with the kinetic limitations in fuel consumption rates as necessary to make relatively accurate assessments of the remaining lifetime of a star is pivotal to using those same physics in properly managing fusion-based bombs (aka h-bombs) as well as establishing basically every practical estimation of the necessary operating conditions for the tokamak reactor and successors.

Meaningless to you? Only you can tell us if that is the case. Does it being meaningless to you have any bearing on the value the information represents to professionals in both the fab building and astrophysics/fusion physics industries?

 

[zsdersw]

Originally posted by: Idontcare
Capacity calculations and establishing upper limits (boundary conditions) are intrinsic to the initial phases of determining plausible ROI opportunities for any feasibility study relating to fab capacity layouts. I've seen plenty in my time and I haven't seen a one done without this metric of ROI roughly hashed out as a pretext to justification of capital expenditures.

Likewise knowing basic fundamental physics involved in fusion reactions combined with the kinetic limitations in fuel consumption rates as necessary to make relatively accurate assessments of the remaining lifetime of a star is pivotal to using those same physics in properly managing fusion-based bombs (aka h-bombs) as well as establishing basically every practical estimation of the necessary operating conditions for the tokamak reactor and successors.

Meaningless to you? Only you can tell us if that is the case. Does it being meaningless to you have any bearing on the value the information represents to professionals in both the fab building and astrophysics/fusion physics industries?

I have no doubt that any given piece of information has practical meaning to someone, but that's not the point. The point is that the figure "up to 40% of the market" or "5 billion years" is meaningless to most. Consider the following:

- Market fluctuations and competitor activity are highly significant X-factors. A static figure like "up to 40% of the market" is of value to only a very small and specialized set of people.

- While the longevity of the sun is a "nice to know" thing for most or perhaps a focal point for further curiosity, it is not important or significant to most.. because they won't be around to witness it. Civlizations rise and fall over much shorter periods of time than 5 billion years.

 

[hans007]

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

You're failing to read the agreement again. AMD is on the hook for a portion of the losses sustained by GF.

AMD also owns like 35% of GF so they are on the hook for 35% of the losses, and the costs of fabs maintenanec and employees etc are passed on to them anyway as a GF client.

 

[Viditor]

Originally posted by: hans007

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

You're failing to read the agreement again. AMD is on the hook for a portion of the losses sustained by GF.

AMD also owns like 35% of GF so they are on the hook for 35% of the losses, and the costs of fabs maintenanec and employees etc are passed on to them anyway as a GF client.

According to GAAP rules, even though AMD votes 50% of the shares, their ownership is less than 50%...that means that (just as happened with Spansion) GF losses are no longer on their books.
What will be on their books as an asset will be the stock value in GF...

 

[Viditor]

Originally posted by: zsdersw

Originally posted by: Idontcare
Capacity calculations and establishing upper limits (boundary conditions) are intrinsic to the initial phases of determining plausible ROI opportunities for any feasibility study relating to fab capacity layouts. I've seen plenty in my time and I haven't seen a one done without this metric of ROI roughly hashed out as a pretext to justification of capital expenditures.

Likewise knowing basic fundamental physics involved in fusion reactions combined with the kinetic limitations in fuel consumption rates as necessary to make relatively accurate assessments of the remaining lifetime of a star is pivotal to using those same physics in properly managing fusion-based bombs (aka h-bombs) as well as establishing basically every practical estimation of the necessary operating conditions for the tokamak reactor and successors.

Meaningless to you? Only you can tell us if that is the case. Does it being meaningless to you have any bearing on the value the information represents to professionals in both the fab building and astrophysics/fusion physics industries?

I have no doubt that any given piece of information has practical meaning to someone, but that's not the point. The point is that the figure "up to 40% of the market" or "5 billion years" is meaningless to most. Consider the following:

- Market fluctuations and competitor activity are highly significant X-factors. A static figure like "up to 40% of the market" is of value to only a very small and specialized set of people.

- While the longevity of the sun is a "nice to know" thing for most or perhaps a focal point for further curiosity, it is not important or significant to most.. because they won't be around to witness it. Civlizations rise and fall over much shorter periods of time than 5 billion years.

I guess you're just not reading what you don't like...
To refresh your memory, the post of mine that you questioned in the first place was a reply from me to Regs...his question read:

Could AMD even supply the market after 15%?

My answer was that it absolutely could...
You made several disparaging remarks about my reply, so I showed you the math.
You seem to now be saying that the math that I applied to the hypothetical question is itself hypothetical...how could it not be???
My impression is that you really have no point, you just wanted to make some disparaging remarks for the Hell of it...JMHO

 

[hans007]

Originally posted by: Viditor

Originally posted by: hans007

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

You're failing to read the agreement again. AMD is on the hook for a portion of the losses sustained by GF.

AMD also owns like 35% of GF so they are on the hook for 35% of the losses, and the costs of fabs maintenanec and employees etc are passed on to them anyway as a GF client.

According to GAAP rules, even though AMD votes 50% of the shares, their ownership is less than 50%...that means that (just as happened with Spansion) GF losses are no longer on their books.
What will be on their books as an asset will be the stock value in GF...

Yeah it all more or less works out in the end. if GF starts losing money and fails, their equity in it is worthless too.

I am hoping GF doesn't fail, but who knows, AMDs last spinoff is more or less bankrupt already (spansion)

 

[Viditor]

Originally posted by: hans007

Yeah it all more or less works out in the end. if GF starts losing money and fails, their equity in it is worthless too.

I am hoping GF doesn't fail, but who knows, AMDs last spinoff is more or less bankrupt already (spansion)

Your point is well taken...
But remember that the 2 spin-offs are very different. With SPSN, AMD dumped almost all of there shares before they went down the tubes...with GF, they are and will continue to be a key part of AMD's business model.
The good news is that part of the agreement is that Abu Dhabi continues to invest in the expansion of GF (up to $7 Billion IIRC).

 

[imported_Lothar]

Originally posted by: Phynaz

Originally posted by: Lothar

Originally posted by: Viditor
Marketwatch

Intel 79.1%
AMD 12.8%

Is this compared to last year(exactly a year ago) or the previous quarter(3 months ago)?
If it's the later, then that figure is meaningless.

It's previous quarter. Year over year things stand just about where they were 12 months ago.

Much ado about nothing.

 

[Idontcare]

Originally posted by: Viditor

Originally posted by: hans007

Yeah it all more or less works out in the end. if GF starts losing money and fails, their equity in it is worthless too.

I am hoping GF doesn't fail, but who knows, AMDs last spinoff is more or less bankrupt already (spansion)

Your point is well taken...
But remember that the 2 spin-offs are very different. With SPSN, AMD dumped almost all of there shares before they went down the tubes...with GF, they are and will continue to be a key part of AMD's business model.
The good news is that part of the agreement is that Abu Dhabi continues to invest in the expansion of GF (up to $7 Billion IIRC).

Viditor do you know what the private/public status is for GlobalFoundries?

Is it a publicly held entity with fungible stock? Is it registered on an exchange?

Or is it a privately held business subsidiary like Chrysler and Cerberus?

 

[imported_Lothar]

Originally posted by: Viditor

Originally posted by: zsdersw

Originally posted by: Viditor
Yes...depending on which chip, AMD could probably supply as much as 40% of the market.

.. says the resident AMD cheerleader and apologist.

So, in this hypothetical scenario, if the planets are in alignment and the sky is partly cloudy instead of partly sunny, AMD could supply as much as 40% of the market. Nice weasel-word-laden response, Mr. V.

OIC...the rabid Intelista is poking his head up...
Do you just pull these ideas out of your backside?
Let's do the math we've all seen a thousand times before...

Shanghai...at 243mm2, that's ~256 candidate dice per wafer. At a minimal 80% yield that's 204 dice per wafer
If all of AMD's chips were that large, they could produce (based on the capacity of 45k wspm for all their Dresden Fab space, and if GF made only AMD chips) 9,180,000 shanghai chips per month. Worldwide shipments are around 80 million/quarter...

Now what percentage of demand do you suppose will be for those 243mm2 chips, and what percentage for the 126mm2 X2, or the 117mm2 Athlon II???

As I said (and have now shown with the math), 40% is not a problem...

Let me get this straight, so what you're telling us is...
Supply is not the issue, but demand is?

If demand is the issue then maybe they should make better processors?
If neither supply nor demand is the issue, then what is?

 

[imported_Lothar]

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

If "not building fabs" or "being fabless" were such a profitable venture, you can bet that Intel wouldn't waste money building them and spend billions upgrading them every year.

 

[Idontcare]

Originally posted by: Lothar
Let me get this straight, so what you're telling us is...
Supply is not the issue, but demand is?

If demand is the issue then maybe they should make better processors?

This is self-evident, is it not?

Originally posted by: Lothar

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

If "not building fabs" or "being fabless" were such a profitable venture, you can bet that Intel wouldn't waste money building them and spend billions upgrading them every year.

In business this is a well-studied general concept referred to as vertical integration. The pro's and con's of being vertically integrated (having everything "in-house" versus outsourcing some of it) is one of business strategy and entails resource management within the context of competitive assessment and environment.

The existence of a thriving foundry business sector should be proof enough of the eating of some pudding that for a considerable number of fabless design houses there is no need to own their fabs in order to make profits.

It's not a one-size fits all business situation, business strategy is quite diverse. Economy of scale means it is profitable for some businesses to remain vertically integrated and maintain their own fabs and R&D teams, for others it just doesn't make for a profitable effort when the volume of product is taken into consideration.

 

[imported_Lothar]

Originally posted by: Idontcare

Originally posted by: Viditor

Originally posted by: hans007

Yeah it all more or less works out in the end. if GF starts losing money and fails, their equity in it is worthless too.

I am hoping GF doesn't fail, but who knows, AMDs last spinoff is more or less bankrupt already (spansion)

Your point is well taken...
But remember that the 2 spin-offs are very different. With SPSN, AMD dumped almost all of there shares before they went down the tubes...with GF, they are and will continue to be a key part of AMD's business model.
The good news is that part of the agreement is that Abu Dhabi continues to invest in the expansion of GF (up to $7 Billion IIRC).

Viditor do you know what the private/public status is for GlobalFoundries?

Is it a publicly held entity with fungible stock? Is it registered on an exchange?

Or is it a privately held business subsidiary like Chrysler and Cerberus?

AFAIK, it's completely private.

 

[imported_Lothar]

Originally posted by: Idontcare

Originally posted by: Lothar

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

If "not building fabs" or "being fabless" were such a profitable venture, you can bet that Intel wouldn't waste money building them and spend billions upgrading them every year.

In business this is a well-studied general concept referred to as vertical integration. The pro's and con's of being vertically integrated (having everything "in-house" versus outsourcing some of it) is one of business strategy and entails resource management within the context of competitive assessment and environment.

The existence of a thriving foundry business sector should be proof enough of the eating of some pudding that for a considerable number of fabless design houses there is no need to own their fabs in order to make profits.

It's not a one-size fits all business situation, business strategy is quite diverse. Economy of scale means it is profitable for some businesses to remain vertically integrated and maintain their own fabs and R&D teams, for others it just doesn't make for a profitable effort when the volume of product is taken into consideration.

I don't see it as a "company specific" thing at all. I see it more of an "industry specific" thing.

Surely if being fabless was more profitable/beneficial than owning fabs, then there is no doubt that Intel would outsource theirs as well rather than continue spending $11-12 billion in upkeep every year to build and upgrade fabs when they can pay that money to their shareholders in dividends. If you're using the current thriving foundry business sector as an example here then surely that could mean Intel's stock is potentially undervalued and they could do so much more by selling or outsourcing their own fabs.

AMD's strategy could backfire by providing Intel with a key competitive advantage: complete control of its manufacturing operations, something AMD will no longer have.
AMD could become more vulnerable in the event of a vicious price war with Intel, similar to what happened to makers of memory chips(Qimonda{bankrupt}, Hynix{already bailed out twice by the Korean government}, Micron, and many others)
Intel can easily cut their chip to whatever the "cost of production is plus $1" anytime they please.
How far is "Global Foundries"(or more importantly, Abu Dhabi?s Advanced Technology Investment Co. (ATIC)) willing to go to compete with Intel in a price war? Are they willing to sell at almost a loss or no profit for years(Intel can easily do this since they have tons of cash on their balance sheet)???

I'm not saying what AMD did is the wrong way. I'm just saying it has many other potential risks.
In conclusion...I will leave this quote by AMD's founder, Jerry Sanders.
"Only real men have fabs."

 

[Viditor]

Originally posted by: Lothar


Let me get this straight, so what you're telling us is...
Supply is not the issue, but demand is?

If demand is the issue then maybe they should make better processors?
If neither supply nor demand is the issue, then what is?

Supply certainly is not an issue...
There are many other issues, and of course processor demand is one of the biggest.
Is it all about the processors? IMHO it is not...but that is just opinion.
You should keep in mind that Intel has been found guilty of illegally stacking the deck in 3 countries so far, and the US case is coming to court in Feb...

If Intel weren't a monopoly with the huge dominance they now have, they just might be a fabless company. You can't compare Intel's business plan to AMD's, they are in vastly different situations.

 

[zsdersw]

Originally posted by: Viditor
..JMHO

That's super.

 

[Phynaz]

Originally posted by: Viditor

Originally posted by: hans007

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

You're failing to read the agreement again. AMD is on the hook for a portion of the losses sustained by GF.

AMD also owns like 35% of GF so they are on the hook for 35% of the losses, and the costs of fabs maintenanec and employees etc are passed on to them anyway as a GF client.

According to GAAP rules, even though AMD votes 50% of the shares, their ownership is less than 50%...that means that (just as happened with Spansion) GF losses are no longer on their books.
What will be on their books as an asset will be the stock value in GF...

Oh Rly?

1st quarter conference call:

As reported in our 10-K, capital expenditures for 2009 will be about $150 million for AMD Product Company and about $760 million for GLOBALFOUNDRIES.

Why then are they spending capital on GF?
Because the agreement says they must provide funding.

On the cost side of the equation, you know, to get simple it?s two big levers; factory utilization which today is very low, so clearly as I said we?ve got plenty of supply. We just need to run the factories a little bit harder if we see the demand. And then shipping 45 nanometer and 40 nanometer stuff whether that?s a CPU statement or a GPU statement. Those are the two big levers on the cost side of the equation.

Hmmm...factory utlilization affecting profits...sounds like they are on the hook for GF loses.

How do we think about the gain loss on Foundry operations in the second quarter?

You know, it?ll be at a loss. I guess I would frame it this way. It?ll be in a loss position as Doug outlined at the analyst day as it continues to try to build out the requirements to become a separate company, to hire a sales force, buy or build the right technologies to sell to somebody else besides AMD. So it?ll incur losses

AMD losing money on GF operations in the second quarter.
I can't wait for how you attempt to spin this, if you even bother replying.

Well, think of it this way, I mean, you know, we?re in that early stage where the manufacturing assets that were in place are to build microprocessors because we?re the only customer. And what we cut I?ll call it in the initial stages of the deal is responsibility to manage costs and to manage the loading, and therefore also pay for that cost. So that?s why I kind of said that, you know, utilization does affect us.

It will be great if you say Robert Rivet is wrong.

 

[Viditor]

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: hans007

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Regs
AMD sells each chip for a profit margin (-cost of goods sold). The only problem is do they make enough profit off of each chip sold to cover all the operating expenses accrued in different accounting periods? The financial statements I've seen so far show that they did not, and that's no big secret, with -5.15 earnings per share.

Going backward, the answer is no...but the vast majority of those expenses are going to be gone now (remember that they no longer own the Fabs). So, going forward, those same profits should show some very nice returns...we shall see.

You're failing to read the agreement again. AMD is on the hook for a portion of the losses sustained by GF.

AMD also owns like 35% of GF so they are on the hook for 35% of the losses, and the costs of fabs maintenanec and employees etc are passed on to them anyway as a GF client.

According to GAAP rules, even though AMD votes 50% of the shares, their ownership is less than 50%...that means that (just as happened with Spansion) GF losses are no longer on their books.
What will be on their books as an asset will be the stock value in GF...

Oh Rly?

1st quarter conference call:

As reported in our 10-K, capital expenditures for 2009 will be about $150 million for AMD Product Company and about $760 million for GLOBALFOUNDRIES.

Why then are they spending capital on GF?
Because the agreement says they must provide funding.

What??? Please highlight that portion of the agreement. I've read it, and I've never seen any such thing.
At the conference call they were merely reporting on what GF is doing because they created GF in that quarter (March 2).
You will notice that they said AMD will have only $150 million in Capex for the year...as opposed to $624 M in 08, and $1.685 Billion in 07

On the cost side of the equation, you know, to get simple it?s two big levers; factory utilization which today is very low, so clearly as I said we?ve got plenty of supply. We just need to run the factories a little bit harder if we see the demand. And then shipping 45 nanometer and 40 nanometer stuff whether that?s a CPU statement or a GPU statement. Those are the two big levers on the cost side of the equation.

Hmmm...factory utlilization affecting profits...sounds like they are on the hook for GF loses.

As I said, GF did not start until the quarter was almost over...March 2.
Also, factory utilization ALWAYS effects profits (even with the chips AMD has made at TSMC). "The larger your order, the lower your price" is a common business practice.

How do we think about the gain loss on Foundry operations in the second quarter?

You know, it?ll be at a loss. I guess I would frame it this way. It?ll be in a loss position as Doug outlined at the analyst day as it continues to try to build out the requirements to become a separate company, to hire a sales force, buy or build the right technologies to sell to somebody else besides AMD. So it?ll incur losses

AMD losing money on GF operations in the second quarter.
I can't wait for how you attempt to spin this, if you even bother replying.

What? Please highlight where it said AMD is losing money over foundry operations. He is saying that GF will be losing money there, not AMD...
Talk about spin...!!

Well, think of it this way, I mean, you know, we?re in that early stage where the manufacturing assets that were in place are to build microprocessors because we?re the only customer. And what we cut I?ll call it in the initial stages of the deal is responsibility to manage costs and to manage the loading, and therefore also pay for that cost. So that?s why I kind of said that, you know, utilization does affect us.

It will be great if you say Robert Rivet is wrong.

All he is saying is that the finished wafer pricing to AMD will be higher at the outset to help defray startup costs. That's why Rivet says that utilization effects AMD...but he goes on to say that it's a short term problem (the initial stages of the deal).

 

[Nemesis 1]

Man after all this back and forth . I just want to know Viditor is this. If GF loses money in a quarter does AMD lose 35% of that amount GF lost . IF yes . Makes sense . If reply is no, than Intel lawyers will eat them alive.

Capital expenditures of GF = 35% AMD expenditure

Capital Gain /Loss = 35% AMD gain/loss/

If GF /AMD report any differantly Intel will destroy them in court.

 

[Nemesis 1]

Now you must remember GF is breaking ground in june on NY site . NY states not footing whole bill . AMDs share of cost will be over 1 billion .

 

[Idontcare]

Originally posted by: Nemesis 1
If reply is no, than Intel lawyers will eat them alive.

And reduce them too what?

Intel cannot afford to put AMD out of business/competition. They know it and so does AMD.

 

[imported_Lothar]

Originally posted by: Viditor

Originally posted by: Lothar


Let me get this straight, so what you're telling us is...
Supply is not the issue, but demand is?

If demand is the issue then maybe they should make better processors?
If neither supply nor demand is the issue, then what is?

Supply certainly is not an issue...
There are many other issues, and of course processor demand is one of the biggest.
Is it all about the processors? IMHO it is not...but that is just opinion.
You should keep in mind that Intel has been found guilty of illegally stacking the deck in 3 countries so far, and the US case is coming to court in Feb...

If Intel weren't a monopoly with the huge dominance they now have, they just might be a fabless company. You can't compare Intel's business plan to AMD's, they are in vastly different situations.

That's a lot of speculation on your part.

The only thing I see here is AMD making a possibly short-sighted move for short term profit(which they have to do to survive).
In the long term however, owning your own fabs is a more profitable venture than being fabless.

Owning your own fab is very capital intensive initially, but it seems to be worth it in the long run.
Not having your own fab leaves you open to too many more variables and something as little as a pricewar with Intel would affect AMD much more so than if they had chose to keep their own fabs.

AMD and Intel are the monopoly they are today in the processor market, because they killed many competitors who were stupid enough to not have their own fabs(or outsourced them to other companies) in the '70s and '80s.

 

[imported_Lothar]

Originally posted by: Nemesis 1
Man after all this back and forth . I just want to know Viditor is this. If GF loses money in a quarter does AMD lose 35% of that amount GF lost . IF yes . Makes sense . If reply is no, than Intel lawyers will eat them alive.

Capital expenditures of GF = 35% AMD expenditure

Capital Gain /Loss = 35% AMD gain/loss/

If GF /AMD report any differantly Intel will destroy them in court.

I don't understand the point you're getting at.

 

[Viditor]

Originally posted by: Lothar

Originally posted by: Viditor

Originally posted by: Lothar


Let me get this straight, so what you're telling us is...
Supply is not the issue, but demand is?

If demand is the issue then maybe they should make better processors?
If neither supply nor demand is the issue, then what is?

Supply certainly is not an issue...
There are many other issues, and of course processor demand is one of the biggest.
Is it all about the processors? IMHO it is not...but that is just opinion.
You should keep in mind that Intel has been found guilty of illegally stacking the deck in 3 countries so far, and the US case is coming to court in Feb...

If Intel weren't a monopoly with the huge dominance they now have, they just might be a fabless company. You can't compare Intel's business plan to AMD's, they are in vastly different situations.

That's a lot of speculation on your part.

The only thing I see here is AMD making a possibly short-sighted move for short term profit(which they have to do to survive).
In the long term however, owning your own fabs is a more profitable venture than being fabless.

Owning your own fab is very capital intensive initially, but it seems to be worth it in the long run.
Not having your own fab leaves you open to too many more variables and something as little as a pricewar with Intel would affect AMD much more so than if they had chose to keep their own fabs.

AMD and Intel are the monopoly they are today in the processor market, because they killed many competitors who were stupid enough to not have their own fabs(or outsourced them to other companies) in the '70s and '80s.

I agree with most of what you said....
But owning a Fab only makes sense if you have the volume to keep the Fab fully utilized.
It can also be very risky when the market takes a nose dive...your expenditures remain far higher in relation to a reduced revenue, and you have to be able to absorb that huge loss.
Intel can certainly afford those losses, AMD cannot.