AMD (AMD) has been bragging that it will introduce a new high-end chip for desk-top computers. It will make PCs run faster, especially for hungry video and gaming applications. The chip, Phenom, is about to hit the market.
Unfortunately, the competing product from Intel (INTC) has more power and a head start in the market. According to The Wall Street Journal "Intel, which packages dual-processor chips together for its quad-core products, still has bragging rights at the top end of the enthusiast market."
AMD would be fine if it did not have a larger competitor with huge operating income, a better balance sheet, a bigger sales force, more customers, and better R&D. If wishes were horses all the beggars would ride.
Less than two years ago, AMD was a $35 stock. It now trades at just over $6. It made an ill-advised buy-out of graphics chip company ATI and took its debt up to $5 billion in the process. More important, it has not kept pace with innovations from Intel.
It may well be that AMD is simply a company which cannot be fixed.
Douglas A. McIntyre
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