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AMD To Close Plants, Lay off 2300, Lose Gateway 457

cdrudge writes: "According to this article on CNN, AMD will be closing 2 plants in Austin, TX and also their operations in Penang, Malaysia due to slack demand. 2300 jobs will be cut in the process. The same article mentions Gateway dropping it's 'Select' line of computers. Their 'Select' line of computers were Gateway's only AMD-based systems. A Gateway spokesperson said 'We're consolidating all of our offering behind Intel, which was the biggest part of our mix already.'"
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AMD To Close Plants, Lay off 2300, Lose Gateway

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  • by SpanishInquisition ( 127269 ) on Tuesday September 25, 2001 @03:46PM (#2348956) Homepage Journal
    They can still enter the 'heating componment' market.
  • Not Cool (Score:2, Insightful)

    by BravoXL ( 248870 )
    And after reading about the lackluster performance of the new P4 2Ghz this really isn't cool. I hope AMD can stick this one out and get on top.
  • by creep ( 150035 )
    I am an avid fan of everything-AMD, thus this announcement is very saddening to me. I really hope that AMD is able to pull things around, I enjoy being able to build new (and powerful) machines for family and friends for less than $400 in some cases.
  • by Brento ( 26177 ) < minus poet> on Tuesday September 25, 2001 @03:49PM (#2348970) Homepage
    Here's a quote that stands out in the article:

    Separately, embattled PC maker Gateway (GTW: down $0.10 to $6.07, Research, Estimates) said Tuesday it will phase out all of its systems based on AMD processors as part of its broader cost-cutting efforts.

    It's cheaper for them to just source Intel CPU's and motherboards than to run two product lines, basically. I'm stunned that the price difference in the CPU alone wouldn't be enough to keep Gateway using AMD, but there you have it. For once, Intel is a cheaper decision.
    • But why is it a cheaper solution? Because less product inventory means cheaper costs? Because Intel gives better marketing help? Because Intel chips are cheaper than AMD? Because if Gateway dropped AMD, Intel would give them better prices? We'll probably never know.
      • No, because intel will provide fully designed systems (cpu, motherboard, memory, etc), pre-built that Gateway can slap their name on them. AMD won't. When your scrapping for more money it helps that you can cut your design staff completely and outsource it.
      • I think it might be a cheaper solution for Gateway because I was told by a couple of Gateway employees that they see a higher rate of DOA (dead on arrival) complaints/problems for their Athlon-based systems than Intel ones. It might have something to do with the Athlons burning up during initial bootup when the heat sink accidentally falls off during shipping or something else. But in any case, if they have to replace every dead Athlon processor and/or Motherboard with new ones, sticking with Athlon can become costly.

        On the otherhand, Intel's P4's have some thermo monitoring thingy which will shut the processor down in case the heat rises too high, thereby saving the P4's life. This might be the reason why using Intel chips are less costly.

    • It's cheaper for them to just source Intel CPU's and motherboards than to run two product lines, basically. I'm stunned that the price difference in the CPU alone wouldn't be enough to keep Gateway using AMD, but there you have it. For once, Intel is a cheaper decision.

      Tom (of Tom's Hardware) had an interesting article [] a while back about how easily AMD CPUs and motherboards can get fried. I wonder if a high CPU failure rate has anything to do with this decision...
      • Great FUD! (Score:2, Insightful)

        by SaDan ( 81097 )
        Do AMD processors make a small mushroom cloud when you try to run them without a heatsink? Yes.

        Moral of the story: Use a heat sink. Duh.

        Tom's review was about as impressive as Consumer's Digest reporting that if you order a new Ford Focus without a radiator, the engine might explode. '

        Common sense, people. Sheesh...
    • by garcia ( 6573 ) on Tuesday September 25, 2001 @04:05PM (#2349102)
      Intel is still not less expensive. It is absolute bullshit to think that AMD wouldn't be a better choice for Gateway to sell.

      The problem here is a lot similar (at least in my eyes) to the Pepsi/Coke college thing. Pepsi came on campus here at BGSU [] and gave them $8 million dollars to take PepsiCo as the main supplier of soft drinks (rather than having both like they did before).

      Intel is pulling the same bullshit. They want to squeeze out the competition so they best way to do that is to force large outlets of computers to stick w/one chip vendor.

      I consider this very unethical.

      I don't know if this is exactly what happened in this case (but I can only assume that it is)

      I can't see why people would want to spend more money for less output on an Intel machine when the AMD is tons cheaper and faster.

      Yes, yes, we know the public is misinformed and really believes that clock-size is important but price is what gets most people.

      AMD still wins there.

      Bad choice Gateway.
      • I consider this very unethical.

        Unethical? I believe there was a case where it was ruled that Intel had monopoly power a couple of years back. That would make it not only unethical but downright *illegal*.

        It is essentially not unlike the game that M$ played with the OEMS: Sell only our OS and your price is x, sell other OSes and your price x*10...

        Is anybody at the DoJ paying ATTENTION!!!! AHEM!!!!

        • by MikeTheYak ( 123496 ) on Tuesday September 25, 2001 @05:50PM (#2349776)
          What case would that be? A few years ago, the DOJ investigated Intel on antitrust measures. Intel and the DOJ quietly settled out of court; no harm, no fuss. Considering that AMD DOES make an Intel-compatible product with around 20% marketshare, I don't think you can really show that Intel is a monopoly, even if you restrict yourself to looking at Windows-compatible processors.

          The previous poster admits that he has no evidence that Intel is doing anything illegal, but assumes that they must be anyway. I find this to be just a teeny bit presumptuous. Intel may have simply offered better terms than AMD. Since Gateway only has to pass the cost of CPUs on to the consumer, I don't think that price/performance is so much the issue as a streamlined manufacturing pipeline and/or a worry about public perception.

          • as a previous poster has already mentioned the most expensive AMD chip is $100, Intel = $500.

            How the fuck can you say that Intel was the wiser choice in a market where price makes sense? $899 for the newest Dell machines (just saw an ad on TV). Gateway is a competitor. Why would they want to jack up the price to compete?

            Thus my point is valid. Intel had to do something here to get Gateway to drop them.

            Just b/c AMD holds 20% market share does not mean that Intel doesn't have a monopoly. Pushing out other competition like this is monopolistic practices.

            Fuck that shit.
      • Pepsi came on campus here at BGSU [] and gave them $8 million dollars to take PepsiCo as the main supplier of soft drinks (rather than having both like they did before).

        Intel is pulling the same bullshit. They want to squeeze out the competition so they best way to do that is to force large outlets of computers to stick w/one chip vendor.

        I don't think that's the issue, here. Vendors get a discount for a line of computers (e.g., Dimension, OptiPlex) that use exclusively Intel processors. That's essentially why the Select line exists: to sell Athlons without jeopardizing Intel discounts on other lines. I'm not aware of additional discounts for total exclusivity.

    • by phillymjs ( 234426 ) <.gro.ognats. .ta. .todhsals.> on Tuesday September 25, 2001 @04:30PM (#2349250) Homepage Journal
      For once, Intel is a cheaper decision.

      Perhaps Intel made Gateway an offer they, in their increasingly-desperate financial straits, could not refuse. An offer like, "If you exclusively sell machines based on Intel processors, we'll give you a significant discount over what you'd pay if you offered your customers a choice."

      This is a Microsoft tactic from way back, used with great effect to obtain their OS monopoly. The Microsoft File [] gives a detailed account of them using this tactic to stop Vobis [], a German PC maker from offering DR-DOS. Microsoft gave Vobis a huge discount on the then-new Windows 3.x if they would exclusively sell MS-DOS and stop distributing DR-DOS.

    • Brento wrote:

      I'm stunned that the price difference in the CPU alone wouldn't be enough to keep Gateway using AMD, but there you have it.

      I think it's less "cheaper" (though they'll tell investors that... and in some intangible way, they might be right) than it is "safer".

      One: Intel is a brand name everybody knows from the catchy TV ads. We know the Bunnymen, we know Blue Man Group. They make us laugh and give us warm fuzzies about Intel.

      (Side rant: this points up that companies that do not advertise, cannot displace a well-known, dominant player. The mass market will not buy your product if they've never heard of you. It's practically a law of nature. I've never seen an AMD ad on network TV... could that just possibly start to explain why consumers don't care about them?)

      Two: AMD is literally a bigger risk physically. I think by now we've all seen the videos of AMD chips turning themselves into slag when they lose cooling. Nobody wants to be the PC maker getting sued because their PC caused a fire that did $300,000 worth of damage to some CTO's house in Ritztown. Even less do they want to the PC maker whose halted-and-caught-fire box burns down some working-poor family's two-room cottage, breaking them financially. Until AMD does something about their (lack of) resistance to cooling failure, I sure wouldn't put it in a computer I built for my family and I probably wouldn't run it myself either. Given the videos I'm surprised UL approved their chips (or did they?)

  • by weslocke ( 240386 ) on Tuesday September 25, 2001 @03:49PM (#2348978)
    That brings it up to what? 30,000 or so lost jobs over the last couple of weeks? Definitely not very encouraging.

    Though on another note, it's very disappointing to see Gateway abandon AMD in favor of Intel. Considering that the AMD processors have a tendency to 'whoop the crap' out of comparable Intel chips (when you factor in the cost, especially) it seems that AMD would've been more logical as a "More bang for the buck" system.

    Would anyone like to guess what sort of 'Incentive' was offered by Intel?
    • Incentive (Score:3, Funny)

      by Rev.LoveJoy ( 136856 )
      Stock in Rambus?

      ... kidding...
      - rlj

    • I think that is an understatement.
      Boeing alone was cutting 20,000 - 30,000 workers.
      • That's right. I was thinking about American Airlines at 20,000... but according to this article [] at CNN, as of 9/22 there had already been announcements of over 100,000 jobs cut in the airline industry (airlines & Boeing) alone.

        Then you have all of the IT cuts that've been taking place lately....

        I tell you what, if I weren't the only IT guy where I work (and therefore 'reasonably' secure) I might be looking for a way to make it that way. ;^)
    • Get Real man... (Score:2, Insightful)

      I'd be curious to see how many AMD systems were purchased from Gateway over Intel Systems.

      I'd also like to see how many Dell/Micron/other systems in the same price range were sold over the same time period.

      Don't be so quick to automatically assume like a jackoff that Intel is behind this. If you're a major vendor like Gateway and people aren't buying your $999 AMD boxes, but instead are buying Dell/Micron/other $999 Intel boxes and are outselling your AMD boxes 2:1(high end 4:1), would you waste money and capital trying to push AMD boxes?

      Realize that I have no data to back up my ratios, it's just hypothetical until data is shown to prove otherwise, but realize this...people refuse to buy an unknown. I can't remember how many times I've seen people buy Sony TV's because("it's a Sony, it's the best") whereas a Samsung or Phillips TV might look better and cost less, but people just assume and don't even look at them.

    • by FFFish ( 7567 ) on Tuesday September 25, 2001 @04:09PM (#2349135) Homepage
      I really suspect that the job cuts that have been happening in industries in all sectors are more opportunistic than realistic.

      By which I mean that these people have been deadwood for a good long time: it's just that while the stock market was rewarding those companies unjustly during the boom, those companies couldn't cut their workforce without severely impacting their stock value.

      Now that everything is in the shithole, it's real easy to trash employees: hell, it's even desirable to drop the stock price, so that the company can buy it back for resale at a far greater value once the market recovers!

      In support of this, look at the number of companies writing off intangibles. They're deliberately beating down their stocks, or at the very least don't care whether the stock drops any further.

      Finally, the one big question I have is this: how the fuck do you end up with thousands and tens of thousands of excess employees? You'd have to be insane to retain that many staff when they're unnecessary -- why weren't they being hired/fired in trickles and dribbles, as the company needed/didn't need them? Makes more sense than the freaking cattle-calls they must have chosen when hiring en masse.

      One last note: while being fired is stressful, many of these people are skilled and creative. It may take them a few months to get over the loss, but once they do -- look out! We're going to see entrepreneurship skyrocketing!

      I think that's pretty exciting. There's going to be a lot of innovation over the next few years. Gonna drive the economy to new heights!
      • "Realistic" was the wrong word. Obviously, if they really are deadwood, they really do need to be cut loose. What I mean more is that if the cuts were realistic, they'd have been done long ago and in small doses, not in grand swell foops.
      • look out! We're going to see entrepreneurship skyrocketing!

        Yeah. I've met the entrepeneurs wanting to wash my car windows at stoplights. Absorbing 10K+ jobs is not something easily done in a slowing economy nor do most people have the wherewithal (or attributes) to make them successful entrepeneurs. For every 10 businesses started, only 1 succeeds. And for every 10 of those, only 1 survives to hire more than a handful of employees. Entrepeneurship is difficult in the best of times. Doing it while the economy is in a downward spiral, for most people, is a recipe for disaster.

        I think that's pretty exciting. There's going to be a lot of innovation over the next few years.

        Yeah, I saw that message in my E-mail with the subject line reading "MAKE MONEY FAST", too. I'm sure other folks out there are just as creative...

    • "Considering that the AMD processors have a tendency to 'whoop the crap' out of comparable Intel chips..."

      Maybe today, but remember, 3 years ago AMD was 'less bang, but less buck'. And IA-64 is just around the corner. Who knows, maybe Gateway is betting on that. (Doubtful, since _right_now_ AMD is decidely better, but maybe Gateway is looking futher ahead than I think.)

  • by Rev.LoveJoy ( 136856 ) on Tuesday September 25, 2001 @03:49PM (#2348979) Homepage Journal
    But with the power glut that's become the norm of a 'household' PC and the general economic slow down of late, news like this strikes me as making sense...

    However, the line about Intel "aggressively pricing" their P4's is just so much CNN tripe. A quick look at Sharkey's Extreme Weekly CPU prices [] shows this to be BS.

    (hint: top of the line AMD - 100 bucks, Intel -- 500 bucks)

    - Cheers
    - RLJ

    • The top of the line AMD is a 1.4ghz T-bird on a 266mhz FSB. Which, you are right, is priced at ~100. (Marketing: apple [the fruit])

      The top of the line Intel is a 2.0ghz on a 400mhz FSB. And actually the price is $570. (Marketing: orange)

      You are right, the top of the line is ~$500, but Intel's top of the line carries larger numbers.

      Of course, MHZ isn't an acurate scale of performance or power, but it is the scale looked at by home and business consumers.

      To see where the price war is you need to look at the Pentium 4 1.4ghz (400mhz FSB). That little cpu is priced at $114. A very (price wise) competitive product. (Marketing: apple [the fruit])

      It comes down to comparing apples with oranges, really. It is a nice way to try to prove a point, but still wrong.

      Just remember, AMD was proud to use a mhz rating to describe its chips back when it held the highest.

      Finally, the public can never be made aware of how little mhz has to do with actual performance because it already realize mhz isn't entirely accurate, it just isn't willing to invest the time and effort to investigate actual performace data.

      I can see it now.
      Circuit City Rep.: "Can I help you?"
      Customer: "Yes, what does this mean: AMD Athlon 3.921k D.ALU"
      Circuit City Rep.: "Derstern Arth.. Er, that's the number of additions it can do a minute."
      Customer: "But it's cheaper than this Intel Pentium 4 2.0ghz. Something doesn't seem right, this must be a better computer. My old computer is only a 300mhz, what does that mean?"
      Circuit City Rep.: "Well 2.0ghz is 2000mhz."
      Customer: "I'll take the pentium."
  • I'm no economist (Score:5, Insightful)

    by sllort ( 442574 ) on Tuesday September 25, 2001 @03:50PM (#2348982) Homepage Journal
    'We're consolidating all of our offering behind Intel, which was the biggest part of our mix already.'

    So, because consumer spending is down, Gateway is discontinuing its' discount line of computers. Because consumers want to buy more expensive computers when the economy is in trouble.

    I must be missing something.

    While the price war has left scars on each company, AMD's wounds have been more severe than its larger, deep-pocketed rival.

    Now is the time for Intel to use all of its' financial muscle to crush AMD once and for all. This is capitalism. If Intel can continue bleeding longer by slashing prices below manufacturer cost, AMD will eventually run out of money. Once the economy picks back up, Intel will look out on the sunny pasture of monopoly, where it can play in peace with Microsoft now that the U.S. government has said "OK" to monopolies.

    My advice: buy Intel stock.
    • Re:I'm no economist (Score:3, Interesting)

      by TheSHAD0W ( 258774 )
      AMD isn't a small company, and its processor division is more valuable as a whole than if its assets are dispersed. Even if Intel managed to bankrupt AMD, someone would buy it. And after having bled itself for so long, Intel wouldn't have the resources to pick it up. TI or Fujitsu or NEC or some other happy semiconductor manufacturer would keep the CPUs coming.
      • Sure...just like someone was willing to buy the defunct alpha line (which is licensable!) and continue producing this profitable, fastest-on-the-market chip.

        I think you underestimate how stupid corporate CEO's are, and how greedy.


        • It's not so much about how stupid CEO's are, as how stupid consumers are. If it weren't for stupid consumers, Wintel wouldn't have become so powerful in the first place.
          • Yeah, I wish consumers would vote with their dollar. I really think I'm the only one. I keep a shit-list of companies that piss me off, and refuse to patronize them. I also try really hard not to buy from the biggest company in any given sector.

            Some good it does.


    • > > 'We're consolidating all of our offering behind Intel,
      > > which was the biggest part of our mix already.'
      > So, because consumer spending is down,
      > Gateway is discontinuing its' discount line of computers.
      > Because consumers want to buy more expensive
      > computers when the economy is in trouble.
      > I must be missing something.

      Yes. One thing that you are missing is that
      a company Profit=Sales-Expense.

      While the effect on sales for gateway is not easy
      to predict (on one hand, pure supply/demand formula would,
      as you indicated, decrease sales; on the other hand,
      a lot of people buying Gateways would buy a more expensive
      higher-clock-rated Intel box than AMD one).

      However, the expense for Gareway would be
      significantly reduced, because they would
      eliminate R&D, support and manufacturing overhead
      of having 2 families of systems instead of one.

    • The problem is you're assuming that AMD will run out of cash first.

      AMD has about $1 Billion in the bank. Intel has about $7 Billion in the bank. Intel's expenses are about 10 times as much as AMD. So if both companies were to give away their processors, Intel would run out of money first.

      The assumption that Intel would automatically win a price war is very questionable.

  • just "1300" reductions in job. That place employs tons of people.

    At least that's what the local newspapers say.

    Disclaimer : I'm from penang. But I'm not in penang.
  • big deal (Score:5, Insightful)

    by TheSHAD0W ( 258774 ) on Tuesday September 25, 2001 @03:51PM (#2348995) Homepage
    Yes, I heard AMD was going to close 2 fabs, and take a $100 million charge against earnings. I also heard it'd save $125 million a year doing it. Getting your money back in ten months isn't a bad thing.

    As for Gateway, most of the people who buy them are the ones who are charmed by the sexy "Intel Inside" logo. Those of us who know better don't buy from Gateway anyway.
  • by Freedom Bug ( 86180 ) on Tuesday September 25, 2001 @03:53PM (#2349015) Homepage
    There's not much unexpected here.

    The plants being closed were mainly used for foundry business. AMD does not want to be a foundry: the TSMC's of the world do that much better, and AMD wants to focus on their core competencies: processors and flash. The foundry business is almost accidental. It generally comes from AMD spinoffs designing communications and analog IC's who were transitioning to traditional foundries. Now they'll just have to transition faster.

    The Gateway move was also not unexpected. Gateway is in lots of trouble. They want their big friends (Intel) to help them out, and so they are demonstrating their loyalty to their big friends.

    • That does mitigate the news somewhat, but it's still bad news for AMD. Most people buy computers through large pre-built companies like Gateway and Dell, so losing a major OEM is going to hurt AMD's bottom line.

      But this isn't the first fishy thing I've heard about how Gateway's running their business in the past year. It does seem suspicious that they would cut their more value-oriented lines right when those are what people are more likely to buy.
  • Not the end... (Score:5, Interesting)

    by rkischuk ( 463111 ) on Tuesday September 25, 2001 @03:57PM (#2349041)
    AMD clawed its way up on the merits of its products and zero OEM arrangements. In some ways, not having OEM arrangements is good, since computer manufacturers bully their suppliers down to razor thin margins. NVidia's increasing support for AMD should push things along in the end-user/gaming market, and the new multi-processor chipsets are helping AMD crack a market they've hardly touched - the server market.

    The plants they are closing are their oldest plants, and coincide with a reduction in output that has been seen throughout the sector. It is even possible that it was becoming increasing difficult to find current products that these fabs were capable of producing.

    This isn't the end of AMD, it just means they won't be posting earnings of 50 cents a share each quarter for a while. Intel's feeling the same crunch, and AMD's still got some decent cash reserves.
  • by pythas ( 75383 ) on Tuesday September 25, 2001 @03:58PM (#2349048)
    Our company tried to buy 200 Athlon based systems from Gateway to replace our four year old Pentium Pro machines. They refused to deal at all with us. We couldn't get a configuration we wanted, even though it was clearly possible. They wouldn't give us an extended warranty or upgrade coupons.

    Basically, they told us that "businesses don't want AMD, so we won't sell them to you."
  • Talked to an AMD Rep (Score:5, Interesting)

    by strictnein ( 318940 ) <(moc.oohay) (ta) (todhsals-ooftcirts)> on Tuesday September 25, 2001 @03:59PM (#2349058) Homepage Journal
    Sell computers for my job (in addition to being a full time CS student). I talked to the AMD rep who comes to our store. He had threemajor points:

    One: no new processors from AMD anytime soon. Just renaming the processors and removing mention of the Athlon name (AMD 1600 for the 1.2 GHz, AMD 2100 etc).

    Two: They are making a killing in the corporate market.

    Three: There next big focus area is the laptop market. This will be the only place with "new" AMD processors. Most likely people will see more 1.0 GHz+ AMD based laptop systems soon.
    • by Noehre ( 16438 )
      Perhaps you should check your facts before spreading FUD?

      AMD *is* releasing new processors shortly. Do you not remember the Palomino cored AthlonXP (or whatever they actually decide to call it)? This is destined to ship within the next month at around 1.53GHz.

      And they aren't making a killing in the corporate market, so don't even try and pull that one out of your ass and call it objective fact. Meh.
    • Um could you make worse guesses & maybe take a look at facts?

      Here are some quick notes:
      1- um they will still be named Athlon... In fact AMD AthlonXP 1600 is how I've seen a few system configs listed... & The whole AthlonXP series is set to release within the next few weeks... In fact it could be within 2 weeks if things go well...

      2- um this is so silly I won't comment... Though I wish this was the case...

      3- Compaq announced a 1.2 Ghz athlon4 based laptop yesterday... 1.1 Ghz Athlon4's were already out & have been for ~1 month...

      I will add that AMD is still selling out all CPU's they can make... This alone states that demand has stayed high for their product & we should not worry that AMD is in trouble...
    • Three: There next big focus area is the laptop market. This will be the only place with "new" AMD processors. Most likely people will see more 1.0 GHz+ AMD based laptop systems soon.

      Great! Time to start selling heat resistant lap-covers. :-)
  • Capitalism in Action (Score:3, Informative)

    by none2222 ( 161746 ) on Tuesday September 25, 2001 @04:00PM (#2349069)
    The market is always right. If AMD has to close plants and lay-off employees, that means there aren't enough people buying AMD right now. This is what's so great about capitalism. Otherwise, these employees would be sitting around reading slashdot on company time and the plants would be sitting idle. This way, AMD keeps profits up and can survive to compete another day.

    I don't see that there is much to worry about here. I'd be more concerned if AMD wasn't laying-off people. As it is, I think people have enough computer power for the time being. How many MHz does the average person/business really need?

    There are always going to be adolescents out there who will buy the latest/greatest hardware just for the sake of it(and god bless 'em--they get fleeced and absorb research costs while we level-headed folks get affordable technology); but real people have enough computers right now.

    • The market is always right.

      By what standard do you judge that the market is always right? Do you mean it literally? Do you mean it in theory? Do you mean it in practice?

      Do you consider the fact that people buy things because they are told to do so by the manufacturer? That the only time a manufacturer needs to consider closing a factory is when they cannot successfully convince people to buy whatever that factory produces?

      Are you saying "the market wants more Nikes, therefore it is right that more Nikes be produced and sold"?

      I have a difficult time believing that the "market" desire for more Nikes is "right" in any meaningful way.

    • Disclaimer: Please don't respond to this post, it's just food for thought.

      The market is always right. If AMD has to close plants and lay-off employees, that means there aren't enough people buying AMD right now. This is what's so great about capitalism.

      ... then why don't we say this about Microsoft?
  • So is Intel making REALLY good deals to major manufacturers? AMDs are obviously the price/performance leader right now, so the only reason I could see a failing PC maker switching to the more expensive processor is if they aren't really more expensive. Or possibly the name game is coming into play here. Gateway is better consumers want PCs with a higher GHz value and will be willing to pay for a higher price.

    No matter what the reason, bad move Gateway.

    Although I must take the time to thank Gateway. Over the years they have provided my relatives with enough tech support to keep them from calling me. Hell, they spent 3 hours on the phone with my mom while she installed a new HD she bought at the local computer store, and her Gateway machine wasn't even under warranty anymore. Gee, ya think that could be part of the reason they're having trouble now?
    • Hell, they spent 3 hours on the phone with my mom while she installed a new HD she bought at the local computer store, and her Gateway machine wasn't even under warranty anymore. Gee, ya think that could be part of the reason they're having trouble now?

      Perhaps, but if that will convince your mother to make her next purchase from Gateway, then it was worth it. I've always maintained that customer service is the key to repeat business. Short-term thinkers don't always see this.
  • Here's an Idea (Score:5, Interesting)

    by ClubPetey ( 324486 ) < minus poet> on Tuesday September 25, 2001 @04:05PM (#2349101)
    This might be a little off-topic, but as far as I see it, the problem with Gateway not being able to support a line of computers that does sell that many, is the support cost behind it. You need AMD-knowledgeable tech support, different MoBos, different assemblies, etc.

    Dell, IBM, etc. all have the same problem. And it all seems to be related to the fact that the support costs for a low-margin, low-sales product line is too high. So why are the costs so high? From my experience, it's customer support. Too many people don't know how to use a computer and call (harass) the computer companies tech-support for the most minor of issues.

    So I was thinking... let's turn it around. Create a computer company for smart people. Do not offer tech support. Do not offer customer service (outside of basic order processing) Just assemble and ship the product. If you don't know how to use it, don't buy it from us. A side benefit of this idea would be that "hard-core" computer geeks can stop wandering from site to site to build their computers. Since there's little over-head to cover, prices will stay cheap.

    The same idea can be applied to ISPs. The major cost of an ISP is the customer support staff to go along with it. I'm sure there's a LOT of people out there that would gladly save 10%-25% of their Internet fee in exchange for having no customer support (since most people-in-the-know don't use it anyway).
    • Check out [] if you are in Hawaii. $10 a month for unlimited dial up. No tech support. They give you the numbers you need and that's it. Best of all, they bash AOL users and post their hate mail :)
    • They have this type of ISP in California already!

      $8 for unlimited dial-up... and they are working on a deal to go national.

      I won't lie this is run by a friend of mine so I may be biased, but it is a good deal if you know what you are doing.
  • AMD Products (Score:5, Insightful)

    by mach-5 ( 73873 ) on Tuesday September 25, 2001 @04:05PM (#2349104) Homepage
    I will continue to purchase and recommend AMD products for my customers. Just because Gateway is leaving them behind doesn't mean the rest of the world should too. Buy what you think is best, and what you can trust.
  • by Krieger ( 7750 ) on Tuesday September 25, 2001 @04:07PM (#2349124) Homepage
    Somehow I'm not surprised. Gateway has been consistently using AMD as a bargaining chip with Intel. They have now twice adopted AMD lines and dropped them when they thought they could get a better deal from Intel.

    I suspect that AMD will pull through this, and most likely will re-activate the foundries when they need more capacity, though that might take some time as they still haven't reached 100% at Dresden yet and they're already transitioning to 0.13 micron process.

    What does confuse me is why AMD consistently adopts such low selling prices. I think that people would still buy their processors even if they tacked on a minimum of $50 on the high end, if not even $100. A full base system based on AMD costs $400 these days and for that you can't even get a high end P4.

    Sometimes the market economy and technology adoption just confuses me. I mean we've had Firewire (IEEE 1394) for almost a decade and it's only just now catching on, and even now with great resistance... go figure.
  • Another great move by a PC manufacturer! Who needs the best chips on the market based on cost/performance anyway?

    It never ceases to amaze me, the utter shit that PC manufacturers sell to people. Compaq, Dell, Gateway, etc., sell absolute complete shit. They're always trying to make it difficult to upgrade, or they're fucking up Windows and making it incompatible with Office(yes, Compaq did this once... talk about an oversight), or combining good CPUs with shit for ram etc...

    If you ask me, the only way to go when purchasing a PC is to buy the parts you want and put it together yourself. I have never seen an off-the-shelf PC that was something I would want to use.

  • The AMD chips get so darn hot, gateway would need to build a bigger box(more$$), get a higher quality pwrspl(more$$).

    FTR I own an AMD 1.4 and my midtower can't circulate enough air, even with a Dragon Orb 3.
  • It's become ovbious to me with this story and others like it that the only way to get a PC that I really can have confidence in and rely upon is to build my own from the ground up. I know how to do this once I have all the parts in front of me, but I'm really out of the loop when it comes to where to get those parts. Anyone who has any suggestions, please submit a list of every component a standard PC would need and where it could be purchased, I'm sure many slashdotters could use it. Thanks in advance!
    • Go to, I have bought many computer parts from places I've found by searching there.
    • by Brian Stretch ( 5304 ) on Tuesday September 25, 2001 @05:40PM (#2349704)
      See my homepage, where I detail the parts I used for my 1.4GHz Athlon machine for work. It's the third Athlon system I've built, preceeded by numerous 386/486/Pentium/PPro/K6 systems.

      Antec has a new 350W p/s that makes a good, inexpensive choice for a single-CPU system, and they sell a nice midtower case that comes with it. I say "inexpensive" relative to the PC Power & Cooling gear I usually get.

      Toy stores: [] for selection, [] for price. I've bought a lot of stuff from MWave, haven't tried Newegg yet but will next chance I get, they're supposed to be good. EMS Computing [] has great prices on Antec stuff, I bought from them once, but their site is s-l-o-w.
    • Return question: is this so hard in the usa? Here in my medium-size city in the Netherlands there are at least 5 shops that sell components. Ofcourse they also offer complete (customizable) systems, but their main business is parts.
      Building your own system is a lot cheaper than buying a ready-made system (especially if you buy from different shops), and you have control over which components make up your system. I like it :)
      OOTR: not one (read "none") of the people I know have bought an Intel system recently. They all bought AMD...
  • by fobbman ( 131816 ) on Tuesday September 25, 2001 @04:30PM (#2349248) Homepage
    I'm not sure about their Malaysian fab, but the one in Austin was only producing Durons at the end, with all of the Thunderbirds coming out of their new Dresden, Germany fab. Dresden was built to encorporate copper interconnects into the chip, and Austin was never upgraded.

    Last I heard Dresden wasn't anywhere near capacity, so I guess that it's not too surprising that they would move production over there with their future lines.

  • by Zen Mastuh ( 456254 ) on Tuesday September 25, 2001 @04:30PM (#2349252)

    I have had my fill of corporate cynicism in recent weeks. For once, I wish owners of corporations would pick a year (this year, maybe?) to not make a profit. Year after year, in all industries, the fruits of innovation and automation flow to the investor class. The flow appears to only go in one direction, for a slight recession and a single day of terrorism have spawned an outbreak of Layoff-itis. People everywhere are being layed off--an action with permanent results--in response to temporary conditions, all to maintain the level of profit that the Leech Class has grown accustomed to.

    Now AMD joins the long list of companies perpetrating vast economic terrorism against people whose only crime is filling out a job application and working diligently day after day. Who will feed these 2,300 families and the ~100,000 families who were likewise fucked by the airline industry? Who will comfort the children whose parents commit suicide in desperation?

    These are the people who make our laws, fill our heads with memes designed to guarantee permanently increasing profits, poison our water, and drag us into international conflict. Like the gods, they kill us for their sport. Have no sympathy for them--sell off all your stock and kiss those motherfuckers goodbye.

    Jesus of Nazareth said something once that has perhaps never been more true: Money is the root of all evil.

    • What's disappointing to me is not so much that people were laid off - the airlines and AMD were respectively both in dire financial straits before the WTC disaster. The real issue is that rather than making sensible decisions, companies time their layoffs to make it have the least impact on their stock valuation. The airlines reacted now, because, hell, their stock is going to bomb anyway. AMD announces it's going to post a loss and knows it may as well pile on the layoffs, not much more damage. Not only that, but it makes them look like they are "restructuring" which makes investors happy. I worked at a company that was consistently doing poorly, and it was evident from inside the company, but they posted cheery quarterly reports. Then one quarter they lump all of their losses together, lay off a few people, and take it all on the chin. This financial maneuvering is pretty ridiculous and cheats the public and the company's investors.

      I think I digressed more than enough there - essentially it's disgusting that companies exploit the WTC disaster to raise their stock valuation. The same way that it's dispicable that the next day senators were tacking missile defense amendments onto critical relief packages (luckily failing) and that Israel attacked a city it had been besieging. A big news item like the WTC disaster essentially blacks out all other news, and the exploitation of that factor was pathetic.
  • by weslocke ( 240386 ) on Tuesday September 25, 2001 @04:32PM (#2349266)
    I snatched this from [H]ard|OCP [] since it was pretty darned relevent.

    Regarding the AMD - Gateway stories, just remember that AMD isn't "suffering a blow" per se, as some people have been saying in relationship to this article. PC Sales have slumped BAD over the last year, Gateway and Dell have both been laying people off...etc. These are extremely tough times right now everywhere...not just the PC sector. Things are going to be rough for a while.

    In response to stories today about AMD's business relationship with Gateway, please consider the following information:

    Gateway continues to sell the Gateway Select 1400, a performance PC based on the 1.4GHz AMD Athlon(tm) processor. ( [] ) AMD plans to continue working with Gateway to determine how AMD can help meet the needs of Gateway's customers. Computer manufacturers refresh their product offerings on a cyclical basis throughout the year. We work with them during each design cycle to determine how AMD's processors can meet the needs of their customers. This is an ongoing process, and we are always competing for business.

    AMD's products are used by computer manufacturers around the globe. AMD's OEM partners sell more AMD processor-based systems today than ever before in the company's 32-year history. In the most recently-completed quarter, AMD experienced record unit microprocessor sales of our award-winning AMD Athlon and AMD Duron processors. In addition, AMD's worldwide unit market share for x86 processors has risen from 16.2 percent in Q499 to greater than 22 percent for Q201, according to Mercury Research. AMD today has the most diverse microprocessor portfolio in the company's history. We are providing our partners with leading solutions for desktop and notebook computers, and multiprocessor servers and workstations.

  • by Yosho ( 135835 ) on Tuesday September 25, 2001 @05:53PM (#2349795)
    "AMD to Close Pants, Lay --" at this point I did a double-take and realized my error, but still, it was amusing.
  • by peter303 ( 12292 ) on Tuesday September 25, 2001 @06:00PM (#2349851)
    In those recent Gateway TV commercial a cow has
    been telling the Gateway CEO how to run his business.
  • by Detritus ( 11846 ) on Tuesday September 25, 2001 @08:52PM (#2350643) Homepage
    I find it highly entertaining to read all of the knee-jerk responses that say that anyone who buys Intel is an idiot, a victim of Intel propaganda or that AMD is the target of a dark conspiracy. In the real world, there are often other considerations in selecting a CPU other than game benchmarks. If you like AMD systems, fine. That doesn't mean that anyone who makes another choice is a luser.

    Go ahead, mod me down. I've got plenty of karma points to burn.

  • Companies like AMD will never learn the real secret to winning wars in this industry: better marketing. Did Microsoft win with excellent, low cost products? Did Iomega? Did AOL? does anyone? NO.

    AMD needs to just suck it up and start blowing a ton of money on advertising like intel does. They need to bribe, err, encourage PC makers to advertise using AMD CPUs. They need to constantly reengineer things in senseless ways that scre consumers and make them money.

    In reality, the only way AMD can last is to stop being AMD.

It is not for me to attempt to fathom the inscrutable workings of Providence. -- The Earl of Birkenhead