Intel income pain not as deep as feared

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Headline lies!

"Intel income pain not as deep as feared"

No, it's deeper. It's worse than feared. Revenues lower than expected are a more important fact than net income per share - you can only cut costs so much.

Q3 is also going to be lower than expected, despite the release of Conroe? If "the new products are key to the company's recovery...", as Merrill Lynch analyst Joe Osha said, then that doesn't look good. It means the products are expected to help, but won't be enough to help Intel meet expectations.

Part of the problem is that Intel has so much inventory stacked up - they have to slash prices so deeply on the Netburst CPUs that they'll practically be given away. For all of Otellini's braggadocio about Intel's supposed "manufacturing lead" (they made it to 65nm first), he can't turn his lines on a dime like AMD can:

"We generally take care of inventory pretty well," Otellini added. "We think we're starting wafers on the right products now. I'm very comfortable with the current build plans and factory loadings."

AMD has a manufacturing technology acronymed APM (automated precision manufacturing). They can change what's on the line at a moment's notice, they don't have to start a new batch. This is actually more significant than it might first sound, once you realize that it takes weeks for a batch of wafers to go through the whole production process from start to finish. This is key to how AMD will continue to deliver a better price/perf than Intel: AMD is able to keep costs down by turning their process on a dime.

Posted by: techboy_z   Posted on: 07/20/06 You are currently: a Guest | Members login | Terms of Use

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