AMD decided to drop their prices on 24th July, the day after Intel’s price-cut on Netburst CPUs. Intel would announce their new architecture dual core processor “Conroe” on 23rd July. On the same day, the old Netburst based Pentium D CPUs will drop price by 40% to 60%. Manufacturers are deeply concerned about the ratio of Intel to AMD product solution. The entire range gets a price-cut from AMD, with the final drop announced next week.

During Computex Taipei 2006, AMD had held a meeting with 1st tier mainboard manufacturers to announce their new strategy against the upcoming Intel price drop on Netburst CPUs, and Conroe. AMD decided to drop their CPU price on 24th July, the day after Intel’s discount on Netburst.

Intel would announce their new architecture dual core processor “Conroe” on 23rd July. On the same day, the old Netburst based Pentium D prices will drop 40% to 60%. The performance of Conroe known to be better and the price drop has made the manufacturers a deeply concerned about adjusting the ratio of Intel to AMD product solutions.

On 24th July, Athlon 64 X2 would drop 35% to 50% to against Conroe, while Athlon 64 would drop 20% to 30% to against Pentium D. To save the lowend market, Sempron would also drop 10% to 15%, similar to the drop of Intel Celeron. The final drop would be announced next week. Although AMD maintained a small profit of 4 billion US dollars in the past year, the huge price cut is totally unexpected and risky. In addition to the need of expanding Fab30 and Fab38, the price cut would definitely give AMD great financial pressure. Yet it is the last resort for AMD right now. The only hope is the completion of Fab36 in this year, with 65nm process to raise the productivity and lower the cost.

Mainboard manufacturers welcome to the price cut. But they are still more optimistic of the upcoming Intel platform and just looking forward to the response from Intel. Intel takes the advantages of their resources and technologies in this price and performance war. AMD still has no other solution but to cut prices against Intel till they are ready for AMD K8L architecture.