Feeds

Do Athlon K7 figures add up for AMD?

It's going to be a narrow squeak...

  • alert
  • submit to reddit

High performance access to file storage

Analysis The cynical amongst us might suspect that AMD introduced its Athlon K7 processor slightly early to somewhat mollify the thrashing it would get on Wall St after CEO Jerry Sanders III delivered his $200 million loss warning for Q2 yesterday evening. However, an AMD European executive claimed that was not true today, but he was prepared to talk in a little more detail about the pricing pressures on the company. Robert Stead, European marketing director at AMD, said that while the market is very competitive, that means his company was being taken "much more seriously". Sanders claimed yesterday that heavy grey market activity, coupled with aggressive pricing from Intel on the Celeron platform would contribute to AMD's loss in Q2. He also claimed that Cyrix has been "liquidating" its processors as it exits the market, a charge that we are hoping the subsidiary will rebut later today. That is, of course, if the Cyrix sub is not taken over today by a Taiwanese company, as Web gossip appears to suggest. Stead said that AMD will release official K7 benchmarks in the near future, but would not say when. How will Intel react to the introduction of the K7-Athlon? A representative said that the company would continue to attempt to offer the best price/performance in every segment of the market. Intel's Pentium III prices (last changed 13 June), are $268 for the 450MHz part, $482 for the 500MHz part, and $744 for the 550 part. Intel doesn't have a 600MHz part yet, but we can expect to see the company slash its prices to once more put pressure on AMD in the near future. While AMD has been shipping some K7 parts, the mathematics of its ramp are interesting. In a conference call yesterday, he said that AMD will make tens of thousands of K7s in Q2, hundreds of thousands in Q3 and as much as a million in Q4 of this year. While the K7s are currently being produced in its Austin fab, our information is that when Dresden starts serious production, it will be at .18 micron, meaning more yields from silicon wafers. Yields are currently good, we are given to understand. However, the maths still make bleak news for AMD shareholders. If you take an average selling price (ASP) of say $500 across the range, by the end of the year the K7 sales forecasted will represent around $605 million, if you say AMD will sell 200,000 processors in Q3. There is of course, the K6-III Alereon line of business but that is being seriously pummelled by Intel, with no likelihood of the grievous bodily harm ceasing. Sanders may or may not being overoptimistic about the million K7s that ship in Q4, but on these figures, it is likely that AMD will not do too good. It wants to resist Intel kicking it on the K7 Athlons, but there is no doubt, from previous indications, that the chip giant will use all of its marketing muscle and deep pockets to keep the pressure on its little brother. Is such a gladiatoral contest, where one opponent is 1,000 feet high and the other a dwarf beside it, fair? The US Federal Trade Commission (FTC) appears to think so. The battle will now be on for AMD to prove itself without retiring hurt, being acquired, or losing completely. ®

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.