AMD Profit Margin Hit By Intel Price War

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Advanced Micro Devices, the No. 2 maker of personal computer processors, reported Wednesday that its profit margin took a hit in its most recent quarter because of its price war with Intel. Some investors are concerned the two rivals will wage another bruising price battle in the upcoming all-important fourth quarter or next year

The Sunnyvale company's stock fell sharply in trading after the stock market closed Wednesday, as investors mulled over AMD's lower gross profit margin. Its shares tumbled 9.2 percent in after-hours trading, falling $2.11 to $22.12. Earlier, its shares closed down 25 cents at $24.23 during regular market hours, before its earnings were announced.

In the past two quarters, according to Mercury Research in Cave Creek, Ariz., AMD has gained market share. Intel has been fighting back with its new Core Duo product family and lowering prices on older chips, such as the Pentium 4. Intel says it is turning around. Tuesday, Intel reported a 35 percent drop in net income, but its results surpassed Wall Street's estimates. Intel Chief Executive Paul Otellini told analysts that with its new PC and server chips, it gained share during the quarter.

AMD said it expects demand for its products to be strong in the fourth quarter and sales to increase from the third quarter.

View: Full Article @ Mercury News

#1 warwagon on 19 Oct 2006 - 14:41

AMD's stock is currently taking it in the shorts today

They are gushing out the ass.

Last edited by warwagon on 19 Oct 2006 - 19:08

#2 Croquant on 19 Oct 2006 - 14:58

Yes. Yes it is.
Next question?

(1 reply) #3 Tammm on 19 Oct 2006 - 15:48

The lack of ambiguity in this thread is amazing! Straight answers for a straight question. Without flames! Neowin is evolving :-)

#3.1 raskren on 19 Oct 2006 - 16:00

Yes, but there are only three posts so far. Just wait.

(2 replies) #4 ernicoats on 19 Oct 2006 - 17:51

Dont forget that AMD is announcing their dual chip "quad core" next month to compete with Intel's quad core. Something they have kept a very good secrete. Could very much help them seeing that many servers are now going to AMD and just maybe all the normal user will need is a new motherboard and another CPU. That would be great and save you a lot of $$ I for one remember the time when the P4 came out and you needed Rambus memory to use it, dont get me wrong they did change to DDR. Thats just my 2cents.

#4.1 ALUOp on 19 Oct 2006 - 21:38

Quote - ernicoats said @ #4

I don't see anything exciting about the so-called 4x4 from AMD.
Dual-socket is old stuff and has been around long time.
The only thing new may be a faster connection between sockets.
As for the 4-GPU thing, even 2-GPU system is not popular, except hardcore gamers, who would buy a 4-GPU system?
Plus, having 4 GPUs doesn't have anything to do with how good their CPUs are.
I think it is just a fancy name AMD tries to use to show that they have "something" as an answer to the recent catchup from Intel.

Intel has the money and process technology advantage.
They can just put two C2D in a package and immediately make it "fake" quad-core C2Q and at the same time sell it at a low price.
What can AMD do?
They can't even afford a bigger L2 cache. Let alone putting two cores in a package.
Too bad that they decided to spend and borrow money to buy ATI instead of improving and catching up in the process technology.
The gap is becoming bigger and bigger.
Last time it was 9-month for 90nm and now it is almost a year since Intel released the first 65nm products.
And next year Intel is going to go 45nm. Probably at that time AMD will have ramped up 65nm production.
Man, I really don't see a bright future for AMD in the near future.
Stock market is just reacting late and slowly as usual.

#4.2 Coolme on 20 Oct 2006 - 08:39

Yes, but how is 4 x 4 useful in blades or severs?? I mean it'd definitely take more space, and it'd need more fans for sure, this means more electricity, more room, more costs. And I don't see them implamenting 4 x 4 in blades at all because it's not possible. So in term of the sever aspect, AMD will be far inferior by the time quad-core Intel Xeons comes around. And in terms of desktop computing, unless they take advantage of the extra die space offered by having two seprate cores, (by adding a boatload of L1 or L2 cache with extremely low latency or add more FPUs, or do something drastic) they are not expected to outperform intel counterparts.

#5 i3iz on 19 Oct 2006 - 20:04

regardless of what they are "going to announce" they did take a big hit today. I would be glad if i sold just prior to the conroe launch. If i had AMD stock of course.

#6 ALUOp on 19 Oct 2006 - 21:54

Wow, now that Nvidia is said to be making x86 CPU+GPU.
The x86 market is getting more exciting!

http://www.theinquirer.net/default.aspx?article=35216

(2 replies) #7 badazzEVO8 on 20 Oct 2006 - 06:14

so what happens when we get down to 0nm?

#7.1 Croquant on 20 Oct 2006 - 09:24

Quote - badazzEVO8 said @ #7

You can't. So nothing happens.
Simple, no?

#7.2 badazzEVO8 on 21 Oct 2006 - 05:33

Quote - Croquant said @ #7.1

how about .000000000001 nm?

#8 yudi_lks on 20 Oct 2006 - 10:14

You will see new architecture called FINFET as we go down to 22nm, and another architectural change to nanowires as we go down to around 10 to 5 nm.. And that's the limit...

#9 Wizard Prang on 20 Oct 2006 - 13:56

I'm seeing a lot of "X is better than Y" posts. They're missing the point.

The point is that there is competition. Without that, Intel would still be selling the PIII-1GHz for $400.

The real winner is... us

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