The Sort Of $150 Quadcore . . .

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You normally don’t get price guidance during an Intel conference call, but yesterday proved an exception:

Q. At this pace, quad-core is in a mix of desktops. What do you expect the mix to be a year from now? Right now it’s probably in the low single-digits, low double-digits, as a percent of your desktop shipments?

A. Well, that’s a demand question. The supply can be almost anything we want it to be. So it really is a function of how the demand grows at certain price points and what the competitive environment for quad or for things greater than 2 core are. Right now we see quad tending to populate the price points for microprocessors that are sort of 150 and above, and that tends to be a double-digit percent of the market but not 50% of the market.

“Sort of 150” sounds a lot like “$163,” the official Intel price point in that area, to me.

That will probably be the less-cache (6MB rather than 12MB) Yorkfield model that will initially be priced at $266, or something like it (maybe a bit slower).

What would a full-cache Yorkfield cost by then? I’d say either $183 or $213, down from the initial $316 price.

If that’s the case, what’s a Wolfdale likely to cost? Seems to me they’ll have little problem sliding into the price slots occupied by the E4xxx chips, if not a bit lower, in a year.

I really don’t see any price relief for AMD here. Intel will keep the pressure steady, and slowly pass the baton from C2Ds to Penryns. AMD’s definite speed and probable production problems will make that easy.

Some are saying, hoping, that the “price war” is over, but all that’s going to happen is that Intel will maintain the status quo and make some more profit from the status quo by cutting costs, most of which will come from the process shrink.

In the meantime, even if you’re grossly optimistic, AMD is stuck at 65nm for at least the next nine months, which means the more quadcores get sold in 2008, the more that shift will hurt AMD.

If you don’t believe me, believe ex-AMDer Henri Richard:

Advanced Micro’s chief marketing officer, Henri Richard, said last week that he was “concerned” that Intel would cut prices of quad-core processors and drive down overall levels in the industry.

“That’s the sign that I am getting right now,” Richard said last week. “If they are pushing quad-core unnecessarily down because they think they can hurt us by doing that, then I don’t think there’s an optimistic view on average prices.”

He was complaining about a $266 price last June. What’s going to be the situation for AMD when the “unnecessarily” low price gets lowered another 30-40%?

Seems to me the only thing AMD can do to compete when that happens is a “sort of $100 Phenom X4” and a “sort of $70 tricore.” If it comes down to that, unless AMD really does have the Mother of All Fairy Godmothers covering their losses, that’s going to leave them “sort of” bankrupt.

Ed


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