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AMD's price-cutting strategy backfires
Written by Gizmo   
Monday, 19 March 2007 19:12

EE Times

Mark LaPedus

Call it the tale of two processor makers: Intel Corp. continues to gain momentum in the microprocessor market, while Advanced Micro Devices Inc.'s apparent price-cutting strategy has backfired, according to an analyst.

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''AMD is taking prices down to levels the industry has never seen before in the low-end,'' said analyst Doug Freedman of American Technology Research Inc. ''We believe poor product mix and excessive channel inventory are limiting the impact of price cuts. We also believe that recent price cuts have been pushed out as they have proven unsuccessful in clearing the inventory or boosting top-line results.''

The moves have hurt AMD, not Intel. ''Despite an uptick in news chatter surrounding the Intel/AMD price war, we believe ASPs remain pressured by AMD's hell-bent strategy on getting to 30 percent MPU market share (24 percent at present) at any cost and as quickly as possible,'' Freedman said. ''AMD is mostly cutting prices in the low-end, which won't have a terrible impact on Intel in the longer term, but large amounts of channel inventory will undoubtedly have some impact on Intel in the near-term results.''

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