Thursday, November 29, 2007

AMD Aims Higher Price-Points with Forthcoming Phenom Chips

Advanced Micro Devices, the world’s second largest maker of x86 chips, will not be able to sell its latest desktop AMD Phenom central processing units (CPUs) for $1000 a piece for several months from now, but next quarter it hopes to be able to target higher price-points than today with AMD Phenom models 9700 and 9900.

“AMD intends to offer the following new processors in Q1 of 2008: a processor model 9900 (2.60GHz) priced below $350 and a Phenom processor model 9700 (2.40GHz) priced below $300,” a spokesperson for AMD said, referring to prices for large customers in 1000-unit quantities.

The recently unveiled quad-core AMD Phenom 9000-series processors are made using 65nm process technology and are initially available at 2.20GHz (model 9500) and 2.30GHz (model 9600). The new chips have thermal design power (TDP) of 95W, a not so low value. AMD Phenom processors 9600 (2.3GHz) and 9500 (2.2GHz) are now available for orders by AMD customers for $283 and $251 respectively in 1000-unit pricing.

Presently, $283 per chip is the highest price that AMD currently asks for a desktop microprocessor. The company also offers dual-core AMD Athlon 64 X2 6400+ Black Edition processor clocked at 3.20GHz for $220 in business quantities as well as dual-core AMD Athlon 64 FX-74 (3.0GHz) chips for 2P platforms for $599 a pair; but the FX-series chips are hardly popular nowadays.

AMD badly needs to be able to increase pricing of its microprocessors as well as improve its profit margins these days. The company lost $1.6 billion in its fiscal year and currently has debts that equal $5.3 billion. Moreover, after the chipmaker acquired graphics and multimedia chip developer ATI Technologies, it lost inconceivable share of its revenues and profits, which now also pulls the whole company down.

Provided that the numbers of the new Phenom chips with higher frequencies are sufficient and the products are introduced on time, the introduction of the AMD Phenom 9900 processor in Q1 2008 will help Advanced Micro Devices to boost its revenues substantially, as the chip has all chances to become popular among certain groups of end-users.

Intel Corp. currently sells its Intel Core 2 Quad Q6700 (2.66GHz) chip for $530 and if AMD’s Phenom 9900 (2.60GHz) shows higher performance amid lower price, then the new CPU will be successful on the market. But if Intel drops the price of the model Q6700 tangibly, AMD’s model 9900 will have to show its potential, or reduce the price.

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