Hurt By Intel, AMD Cuts Pricing

Hurt by competitive pressures from Intel Corp. and other factors, Advanced Micro Devices Inc. (AMD) has cut its product prices in the channels and offered favorable terms to others, according to an analyst. ''We believe AMD is experiencing a challenging Q4'06 from both a demand and a product mix stand point,'' said analyst Doug Freedman of American Technology Research Inc., in a report. ''Intel's new products are having an impact as they ramp Core 2 supply, enabling the company to reverse some recent share losses. In the server market, Intel's quad core has increased the ante in the arms race.''

AMD is taking a number of steps to improve its position, including a plan to cut microprocessor prices by an average of 8 percent in the retail channels. ''We believe AMD has made the following decisions in order to move inventory: 1) A price cut to channel partners; we saw prices decline [about] 8 percent earlier this week, and 2) Favorable pricing to server customers that are in competitive situations,'' said Freedman. AMD has other problems as well. ''AMD has had a mismatch of product at Dell , with significant inventory being made available to channel partners. The dry channel issues are likely to resolve themselves fairly quickly,'' he said.

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News source: CRN

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