I have always argued for this. Share prices would collapse.A couple people mentioned Intel being able to drop their prices low enough to hurt AMD. But, can they? Correct me if I'm wrong, but I've always viewed Intel's margins in the x86 market as a set of golden handcuffs. They're so good they make anything else disappointing, hence why almost all of their attempts to branch out into other markets have been killed off in the end. Wouldn't Intel dropping their traditionally-high margins in their core business seriously spook their shareholders?
Wouldn't Intel dropping their traditionally-high margins in their core business seriously spook their shareholders?
But the 9900k is only that expensive because AMD doesn't yet have a competitor.
The second AMD releases that 8-core, the price for a 9900k drops to match it.
Ok, it lags a bit because Intel, but pretty damn soon AMD has to cut prices again because if prices are close, people will go Intel.
Eventually Intel won't be able to cut the price any further, and AMD starts to really pull ahead, but it'll take a while to get there.
AMD can just put the chips on sale with decent (but not Intel) margins, rack up sales that would have gone to Intel's HEDT line, and get lots and lots of AM4 boards into the wild. And do it starting at launch day.
I really think that time is the key.
Many of us think it's possible that AMDs new chiplet strategy will allow them to sell cheaper because their product is either significantly cheaper to produce than at any previous time, or they are willing to trade product margins for product volume while maintaining healthy profit margins, or some combination of the above.
A couple people mentioned Intel being able to drop their prices low enough to hurt AMD. But, can they? Correct me if I'm wrong, but I've always viewed Intel's margins in the x86 market as a set of golden handcuffs. They're so good they make anything else disappointing, hence why almost all of their attempts to branch out into other markets have been killed off in the end. Wouldn't Intel dropping their traditionally-high margins in their core business seriously spook their shareholders?
Meanwhile, Intel's margins on all of those lost sales fall to 0%.
You probably live on some other planet, because on this planet lowering the price means increasing sales. Lowering prices to grow is a standard practice, which works.Again, slashing prices to grow is an act of desperation, not sound business acumen
The people on the "AMD slash and burn prices" side of the argument really need to get consistent. So Intel can't tolerate losing any of their margin, but they can tolerate going straight to 0%?
You need to be rational and recognize, that if it actually starts to hurt Intel sales, they will respond, and lower prices, and Intel almost certainly has lower production costs, that make it insane for AMD to approach anything near starting a pricing war.
I don't see AMD doing the slash and burn pricing either. It wouldn't make a lot of sense. If they release something with as good or slightly better performance in all metrics as say the 9900K, then they could likely charge 70 to 80 percent of what Intel charges. Branding still has a lot of value, and Intel's Brand is still good. AMD is in the process of rebuilding theirs. But there is no need to come in at 40 to 50 percent of what Intel charges.The people on the "AMD slash and burn prices" side of the argument really need to get consistent. So Intel can't tolerate losing any of their margin, but they can tolerate going straight to 0%?
You need to be rational and recognize, that if it actually starts to hurt Intel sales, they will respond, and lower prices, and Intel almost certainly has lower production costs, that make it insane for AMD to approach anything near starting a pricing war.
You probably live on some other planet, because on this planet lowering the price means increasing sales. Lowering prices to grow is a standard practice, which works.
Comparing AMD to Apple is completelly nonsensical. Apple sells finished products. AMD sells PARTS primarilly defined and judged by TECHNICAL PARAMETERS: computing performance and energy consumption, and price.
That isn't what is being said at all.The people on the "AMD slash and burn prices" side of the argument really need to get consistent. So Intel can't tolerate losing any of their margin, but they can tolerate going straight to 0%?
You need to be rational and recognize, that if it actually starts to hurt Intel sales, they will respond, and lower prices, and Intel almost certainly has lower production costs, that make it insane for AMD to approach anything near starting a pricing war.
Your response to PotatosWithEarsOnSide misses his point so hard I have to assume it's intentional.
Intel's margin on a sale they don't make is zero. Or it's 100% of zero, however you want to look at it.
The point is that Intel has to cut margins, or they will get zero dollars because buyers will choose AMD.
This is bad for Intel.
Also, this thread is the only place on the internet that I've ever seen anybody claim that Intel has *lower* production costs than AMD.
100% of the discussion in the tech press is praise for AMD figuring out a way to make chips for much cheaper than Intel, without sacrificing performance.
Yet here we have you and mockingbird, claiming that economies of scale are more important than chip design (because economies of scale don't apply to TSMC cranking out millions of chiplets?), and that AMD can only lose this price war that they've started.
We all know that they could eat the cost and sell for pennies to kill AMD, (unless antitrust regulators step in), but that's not the same as having lower costs.
Do you have sources on how much it costs Intel to produce a finished product vs. AMD?
Because everybody in the tech press seems to think chiplets are the way to go for high core counts.
This opens pretty important topic.... response to ... misses his point so hard I have to assume it's intentional.
So that's a big NO on putting a pin in it.
Yes. I am aware many of you think that. While it is essentially true for TR and especially Epic, it isn't the case for small-medium desktop CPUs. The yield problem is not a linear one, it becomes prohibitive at very large sizes, it is nearly irrelevant at small to medium sizes.
If anything I expect it will cost more to produce Ryzen 3000 Desktop, than it will cost Intel to produce it's desktop series.
Two different dies, will add to packaging complexity, increasing points of failure and testing costs.
AMD isn't entering a new market, they're and old player who have a recent history of under performing and hot CPUs. Their position is nothing like Apples.
That's more for high core count server/HEDT CPUs. The mainstream desktop dies aren't huge and 14nm yields are excellent.You and Mockingbird are literally the first people I've ever talked to who hold this position. It's always been argued that Intel has to price their products so high because the margins are low due to development costs and poor yields with their massive dies.
I'm not sure I understand, can you show what you mean?
It's always been argued that Intel has to price their products so high because the margins are low due to development costs and poor yields with their massive dies.
You also didn't address my point regarding AMD being nothing like Apple entering a new market:
If you're going to drop that argument, at least acknowledge that this was nonsensical.
That's more for high core count server/HEDT CPUs. The mainstream desktop dies aren't huge and 14nm yields are excellent.
That is total nonsense. Intels Margins are VERY high. In the desktop arena, their dies are NOT massive. Far from it, they have often had smaller dies than AMD.
Given that 7nm chiplets are going to be significantly smaller than Intel's 14nm dies, can you not see the economies of scale here in producing significantly more chiplets from a wafer?
Of course, that 7nm wafer is more expensive, but when you're getting 3x as many chiplets, with a much lower defect ratio, then clearly there's a benefit of scaling.
Then to utilise that increases scale you must sell those chips, which brings with it another economy of scale; those R&D overheads are spread over a much wider sales volume.
It's not then difficult to work out that AMD have gone for a step change in approach, which is clearly targeting significantly increased volume.
If you have huge volumes to shift, you can't be reliant on current pricing methods in order to shift that volume.
So the question becomes "what is the best price that we can sell those CPUs for whilst ensuring that we do sell them all?"
The question is certainly not "At what price do we make the most profit irrespective of how many we sell?"
AMD aren't in this for short term gain.
This is a very sensitive topic on these fora. There have been individuals here, that have in the past, been found advocating "shilling" for the big companies. The accusations and counters were pretty nasty, so there is a strict policy to never allow this to return. Find another way to make your opinion clear. Most here are pretty smart.Sorry, for the off topic, I am new here. What does this mean:
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Did somebody complain about my post? Who was that? The post was about suspition, that Intel damage controll may be active here, because it is the only party not wanting AMD to lower prices of the processors. Consumers want lower prices and better products, regardless of what brand they buy at this moment.
Actually, trying to hide my post is perfectly in agreement to what I wrote.