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On Tue, 09 Sep 2003 05:16:39 GMT, "Yousuf Khan"
wrote: "CJT" wrote in message ... Yousuf Khan wrote: The new low-cost, low-power "Deerfield" Itanium 2 chips released today are the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while the 1.4Ghz costs $1172: http://story.news.yahoo.com/news?tmp...08/tc_nf/22235 Yousuf Khan What fraction do you suppose that is of what it costs Intel to make them? Considering the low volumes and the billions of dollars spent in developing it, I'd say Intel is probably losing money on it. :-) Yup, Intel's only sold roughly 20,000 Itanium chips TOTAL since it's introduction, that's counting every different model they've released. Given a rough estimate of around $5 billion to develop, manufacturer, test and market the Itaniums (this is probably a low estimate), they're looking at a per-chip cost of somewhere on the order of $250,000 per chip : Ok, that's perhaps a bit of a pessimistic view-point on things, but I think it's VERY safe to say that Intel has not come anywhere close to recouping their costs on the Itanium yet, and nor are they likely too unless sales volumes pick up real soon. Part of the problem is that essentially only one vendor is selling Itanium-based systems. Last quarter they only managed to sell 3,250 chips total, but HP made up roughly 98% of those sales. -------------- Tony Hill hilla underscore 20 at yahoo dot ca |
#12
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On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote:
Assuming they sell overseas, at what point (if any) does selling far below cost become "dumping" and perhaps cause problems with, e.g., the WTO? Probably never. Anti-dumping laws are usually only for either government subsidized products or for products that sell for less overseas than they do on their home markets. Besides that, the US is essentially the only country in the world that charges anti-dumping tariffs. The laws are really just a form of government subsidies for industries that are having difficulty competing on their own. -------------- Tony Hill hilla underscore 20 at yahoo dot ca |
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Tony Hill wrote:
On Tue, 09 Sep 2003 05:16:39 GMT, "Yousuf Khan" wrote: "CJT" wrote in message ... Yousuf Khan wrote: The new low-cost, low-power "Deerfield" Itanium 2 chips released today are the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while the 1.4Ghz costs $1172: http://story.news.yahoo.com/news?tmp...08/tc_nf/22235 Yousuf Khan What fraction do you suppose that is of what it costs Intel to make them? Considering the low volumes and the billions of dollars spent in developing it, I'd say Intel is probably losing money on it. :-) Yup, Intel's only sold roughly 20,000 Itanium chips TOTAL since it's introduction, that's counting every different model they've released. Given a rough estimate of around $5 billion to develop, manufacturer, test and market the Itaniums (this is probably a low estimate), they're looking at a per-chip cost of somewhere on the order of $250,000 per chip : Ok, that's perhaps a bit of a pessimistic view-point on things, but I think it's VERY safe to say that Intel has not come anywhere close to recouping their costs on the Itanium yet, and nor are they likely too unless sales volumes pick up real soon. Part of the problem is that essentially only one vendor is selling Itanium-based systems. Last quarter they only managed to sell 3,250 chips total, but HP made up roughly 98% of those sales. -------------- Tony Hill hilla underscore 20 at yahoo dot ca Given the time value of money applied to the $5B, they may never break even. |
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In article ,
says... Stacey wrote: CJT wrote: Yousuf Khan wrote: The new low-cost, low-power "Deerfield" Itanium 2 chips released today are the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while the 1.4Ghz costs $1172: http://story.news.yahoo.com/news?tmp...08/tc_nf/22235 Yousuf Khan What fraction do you suppose that is of what it costs Intel to make them? Including R&D, the manufacturing line, the office help, insurance, power bills etc or just what the bit of a silicon wafer costs? Fully loaded. My guess? $75. Why does the cost of production matter? There is a business to run. With a market in the high hundreds, either the Itanic floats or... ;-) -- Keith |
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On Tue, 9 Sep 2003 22:22:36 -0400, Keith R. Williams
wrote: In article , says... On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote: snip Assuming they sell overseas, at what point (if any) does selling far below cost become "dumping" and perhaps cause problems with, e.g., the WTO? If manufacturers were not permitted to introduce new products and sell them at a loss, we'd be stuck in a world with practically no new products. Indeed! In order to show that Intel was "dumping" Itaniums, you'd have to show that someone was losing business because of it, and that would be a very tough sell. The only people who are going to buy Itaniums are people who, for one reason or another, need a chip like Itanium. 1) That's not dumping (A US manufacturer cannot "dump") 2) Selling at a loss is not illegal 3) even if someone else loses money I'm not an expert on it, but I believe that the EC has protections against predatory pricing similar to those in the US. The US can't stop others from dumping, but it can take retaliatory action in the form of tariffs, and I assume the EC works the same way. In any case, I don't think anybody is going to go to court in the EC over Itanium. Intel has very deep pockets, it has its heels dug in, and it intends to force IA-64 onto the market one way or another. The chip they wind up selling in large quantities may bear very little resemblance to the original EPIC concept, but, barring the apocalypse, Intel intends to make IA-64 its predominant instruction set one way or another. RM |
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Robert Myers wrote:
On Tue, 9 Sep 2003 22:22:36 -0400, Keith R. Williams wrote: In article , says... On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote: snip Assuming they sell overseas, at what point (if any) does selling far below cost become "dumping" and perhaps cause problems with, e.g., the WTO? If manufacturers were not permitted to introduce new products and sell them at a loss, we'd be stuck in a world with practically no new products. Indeed! In order to show that Intel was "dumping" Itaniums, you'd have to show that someone was losing business because of it, and that would be a very tough sell. The only people who are going to buy Itaniums are people who, for one reason or another, need a chip like Itanium. 1) That's not dumping (A US manufacturer cannot "dump") 2) Selling at a loss is not illegal 3) even if someone else loses money I'm not an expert on it, but I believe that the EC has protections against predatory pricing similar to those in the US. The US can't stop others from dumping, but it can take retaliatory action in the form of tariffs, and I assume the EC works the same way. In any case, I don't think anybody is going to go to court in the EC over Itanium. Intel has very deep pockets, it has its heels dug in, and it intends to force IA-64 onto the market one way or another. The chip they wind up selling in large quantities may bear very little resemblance to the original EPIC concept, but, barring the apocalypse, Intel intends to make IA-64 its predominant instruction set one way or another. The Itanic pricing might just possibly be evidence that Intel is attempting to dump Itanics on the market. However, failing spectacularly at an attempt to dump a product is not likely to trigger punitive tarriffs from anyone :-) Laughs - yes, tariffs - no. Note also that not all anti-dumping laws are based on the US model. In Canada, for example, our anti-dumping legislation can come into play if one imported product is dumped on the market at the expense of a competing imported product - even if there are no competing domestic products. I vaguely recall this coming into play about 30 years ago when California sparkling wines were dumped on Canada at the expense of Champagne and other imported sparkling wines. |
#20
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Rob Stow wrote:
Robert Myers wrote: On Tue, 9 Sep 2003 22:22:36 -0400, Keith R. Williams wrote: In article , says... On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote: snip Assuming they sell overseas, at what point (if any) does selling far below cost become "dumping" and perhaps cause problems with, e.g., the WTO? If manufacturers were not permitted to introduce new products and sell them at a loss, we'd be stuck in a world with practically no new products. Indeed! In order to show that Intel was "dumping" Itaniums, you'd have to show that someone was losing business because of it, and that would be a very tough sell. The only people who are going to buy Itaniums are people who, for one reason or another, need a chip like Itanium. 1) That's not dumping (A US manufacturer cannot "dump") 2) Selling at a loss is not illegal 3) even if someone else loses money I'm not an expert on it, but I believe that the EC has protections against predatory pricing similar to those in the US. The US can't stop others from dumping, but it can take retaliatory action in the form of tariffs, and I assume the EC works the same way. In any case, I don't think anybody is going to go to court in the EC over Itanium. Intel has very deep pockets, it has its heels dug in, and it intends to force IA-64 onto the market one way or another. The chip they wind up selling in large quantities may bear very little resemblance to the original EPIC concept, but, barring the apocalypse, Intel intends to make IA-64 its predominant instruction set one way or another. The Itanic pricing might just possibly be evidence that Intel is attempting to dump Itanics on the market. However, failing spectacularly at an attempt to dump a product is not likely to trigger punitive tarriffs from anyone :-) Laughs - yes, tariffs - no. Note also that not all anti-dumping laws are based on the US model. In Canada, for example, our anti-dumping legislation can come into play if one imported product is dumped on the market at the expense of a competing imported product - even if there are no competing domestic products. I vaguely recall this coming into play about 30 years ago when California sparkling wines were dumped on Canada at the expense of Champagne and other imported sparkling wines. It just seemed to me that selling at far below cost to capture sales is a market distortion that might attract some sort of attention. |
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