William Trent_

Advanced Micro Devices: Will Somebody Please Stage an Intervention?

It is more likely Intel and AMD that will be burning the inventory of older chips. They usually have price protection and obsolescence agreements built in to their supply contracts. And whether the solution being created is new or old there are a finite number of PCs for them to go into. You can put an old one in or a new one in, but they are essentially interchangeable. It is how many chips that can be made, not how new they are, that is the issue.

AMD and Intel should continue to innovate and produce chips, but they should do so only at the rate that customers demand them. Both companies are producing more chips to "gain share." They can't both gain share, but if they keep trying they can both lose profit, as they have been doing. And as to having more to lose, Intel can also afford to lose more - it can cut its profit until AMD is actually losing money and forced to throw in the towel - that is the game of chicken that is being played right now, and it is stupid and destructive for both companies.