CPU Pricing

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We haven’t spoken about CPU pricing for quite some time, probably because there hasn’t been much to talk about. For all practical purposes, prices haven’t moved significantly since the fall.

Good news for Intel and AMD, not so good news for us.

The primary reason for this is that it’s pretty hard to lower pricer on older items when you don’t have new items with which to replace them on the pricing structure food chain.

And when both major CPU companies are in that bind (items like the PIV 3.8 and the Athlon 4000+ basically slid into already-vacated price slots when they showed up), prices don’t move.

When might this change?

Since AMD is either incapable or at the least disinclined to start a price war any time soon, pricing looks to be in Intel’s hands. As this article indicates, Intel would like to wait until late July/early August for price cuts. However, sales have been little lackluster lately, and if they remain below expectations, Intel would push them up a couple months, probably to late May.

Admittedly, so long as official prices more-or-less correspond to real prices (and outside of what looks to be OEM outsourcing excess supply of a few upper-end AMD and Intel processors to a few retailers, they are), it doesn’t make sense for overclockers to wait months and months for official price cuts, since official cuts at the low-end only amount to a dozen or two dollars.

So wait for strained silicon and/or rather better overclocking results, don’t wait to save $10.

What About Unofficial Cuts?

Here, there’s a bird in the hand, and maybe two in the bush.

The bird in the hand will be likely discounts on upper-end 130nm Athlon 64s once 90nm production gets cranking. Not something to exactly get riled up about if you’re an overclocker.

The two in the bush?

The first will probably be AMD having anticipatory price cuts, probably about a month before Intel does. Figure the odds on that happening as 50-50, but again, all that would mean is that you’d save $10 a month sooner.

The second possibility will be price cuts caused by the effect of AMD’s finally going into a normal rampup of desktop Hammers. Two years after initial Hammer launch, and eighteen months after Athlon 64 launch, AMD is still making about two K7-generation processors for each K8. Getting to this point normally takes a CPU company about six months.

Nonetheless, these figures should be about 50-50 for the next three months, and over two-thirds K8 in the third quarter. In other words, AMD will be making several million more Hammers a quarter six months from now than they are today.

Can they sell them at current prices? Hard to say. On the one hand, past history indicates “No.” On the other hand, Hector Ruiz is far less likely than Jerry Sanders to just let production rip and let prices fall.

My best guess right now is that unless AMD continues to do badly in flash, and gets really cash-strapped repaying an increasing amount of debt due, the answer will be essentially “No,” maybe a little slide, but nothing like a Thunderbird-era price collapse, when top-end AMD CPUs were being sold for a little over $100.

Sorry, but the price you’ll likely pay for a 3000+ or 3200+ three or six months from now will probably not be much less than what you’d pay today.

Ed

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