Facts of Life . . .

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AMD released its first quarter earnings the other day, basically it was about the same as the Christmas quarter, which is not bad at all, especially compared to what Intel is expected to announce in a few days.

Despite that, their stock took a 10% tumble yesterday.

Why so?

Well, maybe a comparison between the expected June prices shown here and here might be an indicator as to why:

(Just to be scrupulously fair to AMD, we have assumed that equivalent Intel chips need twice the cache needed by AMD chips)

AMD CPU/Speed/Cache

AMD Price

Intel Price

Intel CPU/Speed/Cache

X2 4200+ 2.2GHz 1Mb

$362

$241

Conroe E6400 2.13GHz 2Mb

X2 4800+ 2.4GHz 2Mb

$643

$310

Conroe E6600 2.4GHz 4Mb

X2 5200+ 2.6GHz 2Mb

$800-1,000

$530

Conroe E6700 2.67GHz 4Mb

Does anybody else see a problem here?

And mind you, these are for the Conroes. God knows what Intel will be charging for Pentium Ds by then.

Yes, it’s likely that the Intel mobos will cost more than the AMD, but not that much more.

Yes, this is not the only or most important segment of the CPU market, but it does indicate what Intel’s thinking, and that’s what the analysts were asking AMD about: Intel discounting.

If Intel ends up having the better chip for half the price, what do you think is going to happen? Jeez, some of these prices look pretty good compared to AMD’s single-core products.

Yes, they’re likely to make rather less money the next few quarters than they and the stock market are accustomed to, but since they’re stuck with selling mostly older chips the rest of the year anyway, might as well make lemonade out of those lemons.

Intel can afford a few bad quarters a lot more than AMD, especially since AMD is so heavily relying on creating the image of great momentum and moving from triumph to triumph. A couple big speed bumps could make that strategy unravel.

This is going to be interesting.

Ed