It is not very many chips, but it means a great deal, especially from a PR standpoint. Intel (NASDAQ: INTC) has taken the processor franchise at Dreamworks from smaller rival AMD (NYSE: AMD). Dreamworks indicated that the Intel products worked much better, a public slap at the incumbent.
According to The Wall Street Journal, "DreamWorks Animation said the resulting increase in computing power would substantially shorten the time needed for many computing chores and aid the studio's planned shift next year to 3-D animation." Given how good the press is for Intel, it should be giving the chips to Dreamworks for free. Perhaps that is how it got the contract.
Intel's new eight-core chips are extremely powerful and this should be of real benefit to Dreamworks.
The news is another demonstration of how bad things are at AMD. The company still has over $5 billion in debt and barely breaks even on an operating basis. Its shares are just above $5. In 2006, they were above $40.
AMD can ill afford having its name on the front page matched with another customer loss.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
7-10-2008 @ 9:25AM
Jobu37 said...
I do believe that you hit on something there when you mentioned that Intel may have given the chips away for free. The press release implied that Intel's future chips were more in line with the direction that Dreamworks wants to take. Translated into truth the realease should have said "Intel bought back our business, plain and simple." As you stated the volume associated with this victory is inconsequential. The PR related to it is a day's worth at best. Let's just hope this is not the start of another price war by Intel. That would be bad for AMD but that is Intel's MO in the past each time that AMD starts taking marketshare away which is exactly what is happening in the market currently.