Price war intensifies between Intel and AMD.
Leading chipmaker Intel has a market share which is about four times its nearest rival Advanced Micro Devices, AMD. When the year 2008 began the boardrooms of AMD were buzzing with activity. AMD had high hopes for the year 2008. But as the year rolled by the hopes turned in to despair. The results were dismal in all Q1 to Q3 of 2008. And the figures of Q4 2008 which are shortly expected will have nothing to be written about.
Even Intel is reeling from poor demand of desktops and other workstations. The recession had begun since late 2007 but no body predicted it to be so overwhelming and all encompassing. AMD has been trying to catch Intel over past so many years. But with passing time the gap is getting wider and wider. Not long ago, AMD had many plans under its sleeves. It was looking to bifurcate the design and manufacturing arms in to two separate entities. Plans are still there but the implementation has been hit by sluggish demand and environment.
The first quarter and the ensuing second quarter present lot of troubles for these two chip makers. AMD has plans to cut its workforce by 9% and effect temporary salary cuts for its staff. Intel on the other hand had its profits for Q4:2008 down by 90% over year to year basis. Company has already warned its employees of tougher times and have indicated that Q1 2009 results may be in red. Countering extensive price cuts announced by AMD, Intel too has announced price cuts by whopping 48% in some of its product range. Industry insiders and market watchers feel that cutting of costs will be of prime importance. How the too chipmakers strategise their operations and square off to face the troubled times, will be keenly watched world over.
In response to AMD’s Phenom II “Dragon” x4940(3.0 GHz) priced at $275, Intel has reduced the price of Quad Core chips Q9650(3.0 GHz) from $530 to $316. AMD’s processor have always been cheaper but even then company has not been able to improve its market share substantially. The war has got intensified. Let’s see what happens in 2009.
Update: AMD has further reduced prices of its Phenom II Dragon chips from $275 to $225. Intel will definitely respond. Let’s wait and watch.
May also like to read: Saving earth with better coding
Hi, cool site, good writing