Adding Fuel To The Fire . . .

AMD apparently wants to sell an extra three million CPUs a quarter the rest of the year.

How much is that? Assuming a pretty good second half of the year, that’s about 5% of expected world demand during that period.

On the one hand, AMD isn’t exactly letting the fabs rip and damn the consequences. On the other hand, it’s an extra 5% of supply where supply already exceeds demand.

The recent price cuts have actually aggravated inventory problems. As Digitimes puts it:

With more reductions expected from Intel and AMD, customers have been placing smaller, more-frequent orders than normal in order to delay volume buys until they can get the best pricing,’ Farrell said. “Because of this, inventory will remain in Intel and AMD’s hands for a longer period than usual.

If the OEMs are expecting additional price cuts, maybe you should, too. Not for Conroes, but for anything else.

If Conroe prices end up exploding upward while other prices go the other way, it might not be the worst idea in the world, especially for Sixpackish systems, to match a cheapy chip with a better mobo for a year, then replacing the CPU in a year or so.

But the ideal time for that probably won’t come for a few more months.


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