Intel's legal woes...

[Duvie]

Originally posted by: golem

Well there is some truth in that...however looking at it in a more economy 101 way...intel effectively choked demand for a chip that rightfully so should have sold for more based on its performance. Companies were being strong armed into running an inferior line. ....Everyone knows high demand low supply would equal higher price....I think AMD had some other avenues if needed to get out more supply if needed. Don't just take the assumption because reportedly they sold everything they made as being they couldn't have made anymore through fab efficiencies, older fab conversions, renting fab space from companies (and oh yes there are some around the world that do this)

I don't really see this at all. The channels where you can make the most profit per chip from are not the OEMs if you are capacity constrained. They are willing to pay the least because of they expect a volume discount. Since AMD was selling all they could, they would have to divert chips from the more profitable open market to the more steady, but less profitable OEMs.

The might have been able to convert older fabs, but weren't they already doing this at Dresden? Even at their most profitable years, it was a financial stress to convert 1 fab, and that was with generous subsidies from the German government. Would they have been able to convert another one with less profit from OEM sales?

Generally the CPU companies have the most advanced Fabs. AMD is currently farming out chip production to some outside foundries, but isn't this with the less advanced X2 chips? They are producing all Phenoms in house.

So, If they were selling all they could make in the most profitable channel they could, how would introducing demand from a less profitable channel work?

Prices are not higher today, because Intel wants to set an effective ceiling on what AMD can charge by pricing their low to mid end chips at around 200 to 300. AMD cannot go above this level because thier best chips don't beat Intels mid level chips. This was not the case back then when both companies priced their best chips 900+, only intel can do that now.

That is assumming OEMs wanted them for their low end machines which they sell huge amounts of....The were black-balled from even selling higher end performance chips where they could have made the money. Intel had no answer except over cached heat boxes....

I think you are looking a little too narrow and a little too simple...

Same OEMs they were blocked out of sold workstation boxes where AMD could have made vast amounts of money selling more opterons....




Also when I said prices I wasn't looking at the anamoly of the Q6600...It is quite clear what INtel trying to do there, but look at the price points for each mhz jump there after...they are huge reminding me of the older days...

PLus somehow once again I am thinking you cannot seem to get past what the Q6600 can do in terms of stock 2.4ghz performance but its prowess after you OC it.. I dont think the current price would be all screaming deal at 2.4ghz alone. Yeah it screams becuz I know I can OC it to 3.4-3.6ghz....

I am talking about lack of competition leading to prices we are starting t see and going to see with nehalem. AMD wasn't as weak when the Core 2 or quads came out....however now they are looking downright anemic....This is where we are going to take it in the shorts.


Again do not look at cpus for overclocking value....we enthusiast make up a very small fraction of the market.

 

[golem]

It doesn't matter whether it's low end or high. It's the volume. An big OEM will not create a new line of computers with the attendant support cost issues etc. etc. unless they can do it with guaranteed delivery and lower cost. The OEM has to provide space for a new line of motherboards, cpus, ram etc. etc. and support for this line. If AMD can deliver the required cpus, then the OEM will want it at a discount because your big enough to demand it. But since AMD is already selling all they can w/o the discount, why bother? You're right in that AMD can still sell at a profit by dealing with the big OEM, but it's less than what they were already making selling to smaller makers w/o the discount. It's great if AMD can sell to both, but w/o capacity you sell it to who pays more.

You know, I know, everyone here knows that AMDs chips were better at the time. That's why Intel had to charge less and because they had to charge less your saying this deprived AMD of more profit. What was Intel supposed to do? Charge at a price that it wouldn't sell so that AMD could enjoy higher profits? You can't have it both ways. You can't say Intel had a crappy product and then scream dumping when they charged a crappy price for it.

Yup, your correct. Every price point after the q6600 jumps dramatically. But you know, like you said in your last line, this mostly affects enthusiast (small part of market). For everyone else, they are enjoying relative cheap prices for everything q6600 and below. But truthfully are enthusiast really hurting more than during AMD's days? Didn't AMD charge a minimum of 300 for dual cores for pretty much forever, even the lowest ones? Under 200 is less than 300, not even counting inflation and huge price jumps for small increases are not unique to today. Pretty much been the norm since the beginning.

If you take a poll of prices paid for CPUs. I'm willing to bet, that on average, people paid less for the CPU they are running now than when AMD ruled. Are we going to pay for this if AMD dies? Yup, but your argument about pricing is now vs then, not the future vs then.

 

[Idontcare]

Originally posted by: golem
It doesn't matter whether it's low end or high. It's the volume. An big OEM will not create a new line of computers with the attendant support cost issues etc. etc. unless they can do it with guaranteed delivery and lower cost. The OEM has to provide space for a new line of motherboards, cpus, ram etc. etc. and support for this line. If AMD can deliver the required cpus, then the OEM will want it at a discount because your big enough to demand it. But since AMD is already selling all they can w/o the discount, why bother? You're right in that AMD can still sell at a profit by dealing with the big OEM, but it's less than what they were already making selling to smaller makers w/o the discount. It's great if AMD can sell to both, but w/o capacity you sell it to who pays more.

You know, I know, everyone here knows that AMDs chips were better at the time. That's why Intel had to charge less and because they had to charge less your saying this deprived AMD of more profit. What was Intel supposed to do? Charge at a price that it wouldn't sell so that AMD could enjoy higher profits? You can't have it both ways. You can't say Intel had a crappy product and then scream dumping when they charged a crappy price for it.

Yup, your correct. Every price point after the q6600 jumps dramatically. But you know, like you said in your last line, this mostly affects enthusiast (small part of market). For everyone else, they are enjoying relative cheap prices for everything q6600 and below. But truthfully are enthusiast really hurting more than during AMD's days? Didn't AMD charge a minimum of 300 for dual cores for pretty much forever, even the lowest ones? Under 200 is less than 300, not even counting inflation and huge price jumps for small increases are not unique to today. Pretty much been the norm since the beginning.

If you take a poll of prices paid for CPUs. I'm willing to bet, that on average, people paid less for the CPU they are running now than when AMD ruled. Are we going to pay for this if AMD dies? Yup, but your argument about pricing is now vs then, not the future vs then.

Golem you won't lose this argument you are making because naturally the argument you are making is correct. Selling a product at a price point designed to increase demand to balance supply (inventory) is not illegal.

But unfortunately you are not discussing what Intel supposedly did to cause the fruckus that is underway. The itemized list posted in the OP did not come about simply because Intel priced their chips to move.

The heart of the issue (or maybe just one chamber of the heart of this multi-faceted issue) originates with the allegations that Intel pinned payments of highly lucrative rebates to those who agreed to not sell AMD chips.

It is questionable whether even this acton is illegal unless you happen to practically be a monopoly and the case can be made that you are successfully doing this (creating Intel only suppliers) because you are abusing your market leverage as a monopoly.

This is why the FTC is involved. We'll surely give a wink-wink and a nod-nod to sanctioned monopolies in the US (Intel and Microsoft are considered vital to national security) but we can't keep doing that if these monopolies keep rubbing our noses in the fact that they are a monopoly and we can't/won't do anything about it.

Eventually some hotshot in the FTC and DOJ is going to want to make a career name for themselves by cracking the monopoly of the decade. What is stupid IMO is that Intel so moronically flirted with giving some young come-upper this opportunity.

 

[golem]

Whether Intel will be fined by the FTC or not is not my point. My point is that even if Intel is ruled against, it will hurt Intel monetarily, but it might not necessarily benefit AMD to the extent some think.

If Intel is found guilty, and AMD wins it's lawsuit the damages that AMD receives will be based not only on whether Intel was guilty, but also on how much AMD was hurt. My argument is that Intel can argue that AMD wasn't hurt by it's actions because AMD basically made all the money it could conceivable get based on it's capacity and it's current troubles are based on just the fact that AMD didn't have the funds necessary for more capacity and incompetent management.

 

[bryanW1995]

the punitive damages will be much worse b/c intel is so incredibly profitable.

 

[aigomorla]

Originally posted by: golem
No you're wrong. We are not getting screwed with high prices NOW. We are benefiting from Intel wanting to put a ceiling on what AMD can charge and keeping them cash starved.

If you are talking about the future, then yes, that might and probably will come about. But now, no way.

i think you got my statement confused.

I said at the end of this, we will get screwed. Right now i cant complain about prices.

 

[Idontcare]

Originally posted by: golem
Whether Intel will be fined by the FTC or not is not my point. My point is that even if Intel is ruled against, it will hurt Intel monetarily, but it might not necessarily benefit AMD to the extent some think.

If Intel is found guilty, and AMD wins it's lawsuit the damages that AMD receives will be based not only on whether Intel was guilty, but also on how much AMD was hurt. My argument is that Intel can argue that AMD wasn't hurt by it's actions because AMD basically made all the money it could conceivable get based on it's capacity and it's current troubles are based on just the fact that AMD didn't have the funds necessary for more capacity and incompetent management.

AMD has crafted the lawsuit such that there are only 2 outcomes - (1) Intel loses the lawsuit and pays AMD handsomely, so much so that they remain solvent for a decade to come, or (2) Intel wins the lawsuit and pays nothing or loses but pays next-to-nothing such that in all events AMD goes insolvent in a matter of years thus giving the DOJ absolutely nothing to hide behind any longer and Intel is subsequently broken up for being an undeniable monopoly. (ala RCA and AT&T)

As I keep saying Intel is getting exactly what they wanted, they wanted a monopoly and they've fought a brilliant battle to get there...the problem is that whether you get there by noble means or illegal ones once you get there your lifetime as a business in the USA is fairly limited as all of history tells us.

All AMD is doing is trying to cash in on Intel's coffers before they are inevitably broken up by the FTC and DOJ, AMD loses nothing by trying to do so and they stand a non-zero chance at winning the lottery and living to see another day should they succeed.

 

[Phynaz]

3rd outcome - AMD runs out of cash before there is a verdict. Remember this is going to be tied up in court for another six years at a minimum.

4th outcome - Out of court settlement.

 

[aigomorla]

Originally posted by: Duvie

Again do not look at cpus for overclocking value....we enthusiast make up a very small fraction of the market.

Consumer side as a whole, which the enthusiast make a small fraction of, is even smaller if you take a look at the enterprise side.

Sorry, the consumer sales looks like the average teenagers bank account account compared to the enterprise sales.

And there is no overclocking allowed in the enterprise side, unless you do it via software.

 

[Idontcare]

Originally posted by: Phynaz
3rd outcome - AMD runs out of cash before there is a verdict. Remember this is going to be tied up in court for another six years at a minimum.

4th outcome - Out of court settlement.

#3 leads to same result as my #2 (i.e. without AMD Intel's future has been foretold by RCA and AT&T).

#4 is the same as #1 to me in that it means Intel does what it needs to be do in order to keep AMD alive and itself out of the technical monopoly category, but you are right in that there is very much a difference to the shareholders whether Intel allows legal precedence to be set by losing a courtcase like this to AMD.

I actually think your #4 is exactly what will happen, AMD wants cash and not legal precedence and legal precedence is exactly what Intel can't risk incurring.

 

[taltamir]

Originally posted by: Nemesis 1
Viditor Intel is fighting the koren decision . Also If I were Intel . I would start with Korea. And say No we ain't paying the cost of doing business in korea is to high with finds. Intel should just say no and stop doing business in korea. THan watch them koreans cry like babies .
Better Idea lets break intel up . That sounds great . AMD stole intels tech and now they are cring . You heard about Nehalem so now all of AMDS hopes lie in this lawsuite. PURE BS. This will only push Intel harder to prove AMD can't compete . Thats bad for AMD . IF AMD hadn't sued Nehalem wouldn't be coming out in 4th qt. AMD is its own worse enemy not Intel . AT least not until this lawsuite . Intel is just plane going to finish AMD off. Had AMD not bought ATI . they had a chance . AS it is now . Chapter 11 for AMD in 09.

good points. AMD is pushing intel to kill them. and breaking up intel is way past due.

 

[bryanW1995]

Originally posted by: Idontcare

Originally posted by: Phynaz
3rd outcome - AMD runs out of cash before there is a verdict. Remember this is going to be tied up in court for another six years at a minimum.

4th outcome - Out of court settlement.

#3 leads to same result as my #2 (i.e. without AMD Intel's future has been foretold by RCA and AT&T).

#4 is the same as #1 to me in that it means Intel does what it needs to be do in order to keep AMD alive and itself out of the technical monopoly category, but you are right in that there is very much a difference to the shareholders whether Intel allows legal precedence to be set by losing a courtcase like this to AMD.

I actually think your #4 is exactly what will happen, AMD wants cash and not legal precedence and legal precedence is exactly what Intel can't risk incurring.

I almost feel that this case is better for both parties if it settles out of court. AMD can draw it out for a while longer, however, and their case probably will get stronger (ie, higher settlement) as time goes on.

 

[golem]

Idontcare

According to this

http://www.ftc.gov/bc/compguide/maintain.htm

Note this is the FTC site, and not a random site giving it's opinion on whether Monopolies are illegal.

It is not illegal to be a monopoly, it's illegal to create a monopoly through illegal practices. You could argue that this is what Intel is doing, and maybe it is. But it doesn't necessarily mean Intel will be broken up because of it. (look at Microsoft).

Given this. Why do you think Intel will be broken up? And how would you break up Intel? It can't be broken up into regional branches like AT&T was and R&D and fab building are so expensive now, you could argue that smaller companies couldn't create new processors as quickly as a bigger company could.

 

[golem]

Originally posted by: taltamir

Originally posted by: Nemesis 1
Viditor Intel is fighting the koren decision . Also If I were Intel . I would start with Korea. And say No we ain't paying the cost of doing business in korea is to high with finds. Intel should just say no and stop doing business in korea. THan watch them koreans cry like babies .
Better Idea lets break intel up . That sounds great . AMD stole intels tech and now they are cring . You heard about Nehalem so now all of AMDS hopes lie in this lawsuite. PURE BS. This will only push Intel harder to prove AMD can't compete . Thats bad for AMD . IF AMD hadn't sued Nehalem wouldn't be coming out in 4th qt. AMD is its own worse enemy not Intel . AT least not until this lawsuite . Intel is just plane going to finish AMD off. Had AMD not bought ATI . they had a chance . AS it is now . Chapter 11 for AMD in 09.

good points. AMD is pushing intel to kill them. and breaking up intel is way past due.

taltamir. There are a lot of things that many people feel are past due. Doesn't mean they are right or that there are legal reason to bring about what they want.

 

[Duvie]

Originally posted by: golem
Idontcare

According to this

http://www.ftc.gov/bc/compguide/maintain.htm

Note this is the FTC site, and not a random site giving it's opinion on whether Monopolies are illegal.

It is not illegal to be a monopoly, it's illegal to create a monopoly through illegal practices. You could argue that this is what Intel is doing, and maybe it is. But it doesn't necessarily mean Intel will be broken up because of it. (look at Microsoft).

Given this. Why do you think Intel will be broken up? And how would you break up Intel? It can't be broken up into regional branches like AT&T was and R&D and fab building are so expensive now, you could argue that smaller companies couldn't create new processors as quickly as a bigger company could.

I got to agree with you there....i dont know how you could effectively break them up....

With AT&T it was done regionally. That was pratical sense the infrastructure was well spaced out....

The only thing I could think of is breaking them up as separate entities based on the market. IE...business/ workstations....enterprise/servers....desktop/laptop personal use....

I dont think any of this will happen....

My gut tells me AMD is purchase by someone else and they re-emerge stronger...Just a gut feeling...I think we are going to see some corporate alliances across bouandaries we haven't seen yet.

I agree with #4 above as well....A settlement will be reached and this will end out of the media spotlight.

 

[golem]

I sort of agree with you and everyone else that 4 is most likely too.

 

[dmens]

Originally posted by: Viditor
This means that AMD's chances of a successful and highly lucrative outcome have greatly improved...they will be able to share discovery with the FTC.

you seem to have a lot riding on this. do you ever wonder why you invest in a company that has turned a profit maybe 4 of last 30 years and needs to fire moonshot lawsuits to stay in business?

dont answer now, you can wait until the nehalem 4P+ benchmarks are published. then, the lawsuit is all that's left lol.

 

[Idontcare]

Originally posted by: golem
Idontcare

According to this

http://www.ftc.gov/bc/compguide/maintain.htm

Note this is the FTC site, and not a random site giving it's opinion on whether Monopolies are illegal.

It is not illegal to be a monopoly, it's illegal to create a monopoly through illegal practices. You could argue that this is what Intel is doing, and maybe it is. But it doesn't necessarily mean Intel will be broken up because of it. (look at Microsoft).

Given this. Why do you think Intel will be broken up? And how would you break up Intel? It can't be broken up into regional branches like AT&T was and R&D and fab building are so expensive now, you could argue that smaller companies couldn't create new processors as quickly as a bigger company could.

I'm not arguing about interpretations of definitions, this is a joke to think Intel's fate is secured by a quip on a website. Look at how secure big oil companies are for having windfall profits.

You get a bug up the ass of the decision makers at the FTC and you can bet no one is going to say "hey wait a minute guys, according to our website we can't take Intel to task here...".

Intel does not have the power to decide whether they will be broken up, and so long as some one else has that power the day will eventually come when that someone else is an Elliot Spitzer looking to make a name for themselves by busting the balls of big companies.

History has never proven this perspective to be incorrect. Right now the best I can imagine it is that Intel keeps putting their hand on the stove to see if its hot enough to burn and cause blisters. Someday (I strongly suspect within next 10 yrs) someone is going to turn that stove on and everyone in Intel is going to act like they never saw it coming.

How will Intel be broken up? They've secured this by way of their efforts to differentiate by product line. Itanium, Nehalem, Atom in addition to graphics business with IGP's and Larrabee as well as their psuedo-spunoff memory divisions.

The bottom line is that we laymen don't have to be capable of generating all the how/when/why answers before we can leverage history and say to ourselves "hey what happened to 100% of every monopoly in these united states prior to Microsoft's and Intel's arrival in the 90's?". I'll bet on history repeating because that's a bet on humans continuing to be humans and nothing can be a surer bet.

 

[Idontcare]

Just What It Was Dreading -- Intel Monopoly Rocked By Official FTC Investigation

The new investigation originated with the new blood -- William E. Kovacic, the new chairman of the trade commission.

With the backing of his fellow commissioners, he reversed the decision of Deborah P. Majoras, the previous chair, who had been blocking the investigation for months to the frustration of those on Capitol Hill.

Majoras was a more lenient appointee, and helped work out the antitrust settlement in 2001 with Microsoft.

http://www.dailytech.com/article.aspx?newsid=12011

It's almost like these things follow a script...

 

[bryanW1995]

either viditor works for DT or some DT bloggers are following our forums a little too closely...:shocked:

 

[cubsftw]

Originally posted by: Duvie

My gut tells me AMD is purchase by someone else and they re-emerge stronger...Just a gut feeling...I think we are going to see some corporate alliances across bouandaries we haven't seen yet.

I wouldn't be surprised if NVidia actually made a move on AMD. This would probably be subject to all sorts of anti-trust scrutiny, but if you think about it, it actually makes sense.

A bit of history: currently, there are 2 main players in the CPU world: AMD and Intel. There are also 2 main GPU players: AMD and NVidia. Prior to AMD's purchase of ATI, NVidia and AMD were pretty buddy-buddy: the NForce chipsets were the weapon of choice for the AMD enthusiast and both companies benefited from having the best gaming CPU at the time and the best graphics. However, once AMD bought out ATI, NVidia's former friend quickly became its chief rival. That and NVidia never really got along well with Intel which meant that NVidia was still doing well its GPU business, but was in an uncomfortable place with its chipsets.

So why do I think NVidia will buy AMD sooner or later? First off, they recently introduced the Tegra, a system on a chip and are clearly hungry to explore the CPU market. AMD has the designs for Fusion already in their vault and this makes them very enticing to NVidia. Finally, Intel is working on Larrabee which NVidia is definitely afraid of, even though it won't admit it publicly. NVidia is definitely thinking about how it needs to survive and be profitable if Intel enters the GPU market and AMD has a huge portfolio that NVidia would love to get its hands on.

If it does happen though, I think the enthusiast will be a lot better off than AMD just suing Intel for cash. The fact of the matter is that Intel is the more innovative company right now and is producing the better products. You can argue about how everyone should go buy a Phenom or how AMD needs to be saved by the consumer so that the big bad Intel doesn't rule over the PC world, but that's being irrational. Winning a lawsuit won't change anything: AMD needs to pump out quality products again rather than crying foul at court and I think that NVidia is the solution to AMD's woes.

 

[Acanthus]

Viditor with an anti-intel thread.

Just when i took you out of my sig as the iraqui information minister of AMD.


AMDs financials couldnt possibly be any worse.

Nehalems leap will not be matched by AMD, you can only get the jump from an integrated memory controller once

Have fun toying with the lawsuit stocks though. Im still hanging on to Rambus myself. However im not posting speculation about the stock and financials of Rambus every friggin 3 days on the CPU forums like anyone cares.

 

[Cookie Monster]

IMHO I think that the majority of hardware enthusiasts dont give a monkeys a*us about rambus. (Sorry if this came off as being harsh)

But this is different when it means life or death for a company known as AMD.

 

[myocardia]

Originally posted by: Duvie
My gut tells me AMD is purchase by someone else and they re-emerge stronger....

AMD will no longer be able to make x86 CPU's, if they are bought. People keep forgetting this fact.

 

[AmberClad]

Originally posted by: bryanW1995
either viditor works for DT or some DT bloggers are following our forums a little too closely...:shocked:

I have seen Viditor commenting numerous times on DT articles (not surprisingly, almost exclusively on AMD/Intel related ones). And DT does have a "submit articles" feature that users can use to send in links to newsworthy articles...