Sunday, June 24, 2007
Cutting all around, Intel got a wound from its own sword
While Intel Chief Executive Paul Otellini has grabbed market share, he's still fighting AMD--and sacrificing profits--to get it. After a string of gains for AMD, Intel took 80.2% of the worldwide microprocessor market in the first quarter of this year, up 4.5% from 75.7% during the prior quarter, according to market researcher iSuppli. However, Intel's operating margin for the quarter ending March 31 fell to 18.9% from 19.2% during the year-ago period. That's well off Intel's historic range of between 30% and 40%.
What will happen with margins now when all Intel's 16 000 manufacturing people are out and some fabs closed? What will maintain high margins in the future? Monopoly? No.
Technology advances? No,
45nm will last only 6 months. Architecture advances? Intel's 32 bit optimized architecture compared to Barcelona? Volume advantages? No. AMD now has two fabs, second source in the Far East.
An old Bosnian tale says: Who kills with sword, dies from it in the end.
Moreover, AMD is keeping the pressure on, promising it will win back some of that lost ground this quarter.Scrappy AMD has a history of surprising Intel by defying the numbers and cranking out a better chip, with fewer resources. If AMD's Barcelona is a hit, Intel's price cuts will look prescient. I mean if AMD surivive (and it will) it will be impossible for Intel to rise again its margins to the golden monopolistic age heights. I am curious, if Intel's margins diminish who would finance Intel's ambitious new fabs? Israel, like in latest Kiryat Gat fab?
BUT BE AWARE, in that scenario, only this will left to Intel's visionary management board:
The following map when to be realized, would drive them mad too.
What will happen with margins now when all Intel's 16 000 manufacturing people are out and some fabs closed? What will maintain high margins in the future? Monopoly? No.
Technology advances? No,
45nm will last only 6 months. Architecture advances? Intel's 32 bit optimized architecture compared to Barcelona? Volume advantages? No. AMD now has two fabs, second source in the Far East.
An old Bosnian tale says: Who kills with sword, dies from it in the end.
Moreover, AMD is keeping the pressure on, promising it will win back some of that lost ground this quarter.Scrappy AMD has a history of surprising Intel by defying the numbers and cranking out a better chip, with fewer resources. If AMD's Barcelona is a hit, Intel's price cuts will look prescient. I mean if AMD surivive (and it will) it will be impossible for Intel to rise again its margins to the golden monopolistic age heights. I am curious, if Intel's margins diminish who would finance Intel's ambitious new fabs? Israel, like in latest Kiryat Gat fab?
BUT BE AWARE, in that scenario, only this will left to Intel's visionary management board:
The following map when to be realized, would drive them mad too.
THIS LINK posted by Joseph Bell : 10:17 AM
