News AMD to cut CPU production

http://www.bit-tech.net/news/2009/01/26/amd-to-cut-cpu-production/1

AMD has annouced that it is to cut CPU production to below demand, to create shortages and avoid a backlog of parts building up in the channel.

 

Well, thats one way to put the prices up, and/or switch everyone over to Intel.

 

smart move. This way they maximise their profits from the quads that they do sell. Intel can have the extra marketshare, because upgrading from a q9450 involves a new motherboard (new socket) anyway, so AMD can win them back next round easily. Meanwhile, they let Intel take the hit on decreased value on their excess stock, hoping that in the NEXT pricewar Intel will not have such a huge budget available.

This is really agressive marketing, and i like how AMD is putting up a fight.

 

Crap. And that is why i had to order my Phenoms II all the way from USA. But with AMD it was always like this - my FX-62s (i needed six of them) had to be ordered from somewhere in Spain. Well, i still put my money on AMD and I hope that they know what they are doing.

 

Intel and AMD are not only fighting about customers. This move is targeted to please the investors. They're trying to increase their return-on-investment - percentage. The current economic situation will hack at their shares and maybe cause the rats to leave the ship. With a better ROI-%, this can perhaps be avoided. If they get lucky, they might even win some investors from Intel.

 

“severe industry correction in the IT supply chain, especially in notebooks,”

AMD's share of the notebook market is tiny, so dont know why they are using that as an excuse.

 

Makes sense, really... it's never good to be sitting on 'inventory mountain' where the only thing that can happen to the value of that inventory is that it goes down.

Still, production below demand is a very fine line to walk. They get their estimates wrong, and they're in trouble.

 

I'm sure they aren't in a position to waste money right now, so I can certainly understand it.

 

well if the market is slow anyways and whats on the shelves isnt selling, shorting up the amount of product wont really make that much a difference to the buying end, remember prices only go up if there is a demand to go along with the low stock and in this case there isnt so it shouldnt changes things by much anyways aside from helping AMD a bit.

 

I think AMD is screwed against Intel honestly. We have yet to see pricing for dual-core Nahalem processors and the 32nm processors will be cheaper to produce so I expect the high-end 32nm will be around $850 versus the current $1019 Core i7 965. (NewEgg pricing)

 

Slightly OT, but I think AMD really need to go back to the drawing board with their processor design and manufacturing.

They have only recently released their 45nm chips, ages after Intel has had them on the market. In fact so long after that intel are already talking about the next generation 35nm chips.

Come on AMD, it's time you woke up and did some work.

 

Aw crap, oh well - I wasn't planning on joining the PhII crowd until AM3 anyway so...

 

Guess someone just buys AMD CPUs in order to support them and avoid a monopoly. too bad it's a fight against many as most people think with their wallets, not their ideals. And Intel is currently most bang for the buck and has been for a LONG time.

AMD should get this Dragon* platform going soon. If they could make a complete system builders package for a nice price they could win over many customers.

*) AMD CPU + AMD chipset motherboard + ATI graphics