"Lighting cigarette in front of gas leak"
HENRI RICHARD of AMD came up with a rather picturesque way to describe what it claims Intel has done to its channel partners during the second quarter of this year.
Said Richard, speaking at AMD's analyst webcast like night: "The channel is where most of the unrest has taken place and so we didn't build inventory in the channel [for the second quarter]. We won't light a cigarette in front of a gas leak."
That followed Hector Ruiz saying that the third and fourth quarter will be "challenging" for AMD, because of uncertainty of what Intel will do. Average selling prices will be reasonably flat but AMD will continue to gain share.
Intel has thrown away two brands in the last six months - Intel Inside and Pentium, CEO Hector Ruiz reckoned. AMD doesn't know what other brands Intel will "throw away". The partners are confused and need long term guidance. AMD wants to be a predictable and reliable partner in the second half of this year.
AMD is not building old inventory like Intel, it shipped everything it built for Opterons in the second quarter. Even if Intel is building inventory on the new next generation products, it is still selling old inventory from the Pentium family.
Dirk Meyer, AMD's president, said he wasn't too worried about recent benchmarks of Intel's "Cointrea" chip. He said the performance crown has been passed back and forth for several times in the past 10 years and he expected that to continue. The crown is only of interest to enthusiasts, and 4X4 will appeal to that market. AMD's quad core will be showed off to people by the end of this year, and launch in the middle of next year.
AMD's plan is to build inventory in the third quarter in anticipation of the fourth quarter. Build in second, build a little bit in third, and drain off that inventory in the fourth. Ruiz would not comment on any deals it might or might not have done with Dell apart from the Opteron win.
He also said AMD believed the idea that Intel was offering OEMs and distributors the same flat price was a fairy tale.
Ruiz and Otellini in channel face off
Ruiz said that Intel repositioning Pentium had had a bad effect on the channel. There's still a lot of stock out there. He's cautious about the desktop space because that's where the bulk of the channel business is.
AMD said that it was closely looking at all the [Cointreau] reviews. AMD has never presented AM2 sockets with DDR-2 as giving much more performance. As for fab capacity - these are AMD's plans. In 2007 it will start to take down fab 30 and convert to a 300mm tool set. Fab 30 will never really goes offline, it's a conversion. AMD will never go below 50 per cent utilisation in the facility in the worst quarter of time but Chartered will fill in the blanks during those periods. AMD will produce 65 nanometre chips by "the end of this year".
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