AMD's well may be running dry

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AMD's well may be running dry


Intel is known for its heavy research-and-development spending even during lean times. In 2006, the company said it was eliminating 10,500 positions in a massive restructuring. But it still spent $5.9 billion on R&D ? about 17% of overall revenue ? up from $5.1 billion in fiscal 2005.

By comparison, AMD plowed $1.2 billion ? more than 21% of its revenue ? into R&D last year.

I didn't realize that the R&D expense's for these two companies was this high. It's nice to see an industry that is always looking to improve it's products though, instead of sitting on its duffs just living off what it once created(Microsoft?). Ok, that was a cheep shot at Microsoft. I believe I read where they have an aggressive R&D budget too. I just don't think it is as aggressive as AMD or Intel.

"What this comes down to is the companies are playing a long-term game," said Dean McCarron, principal analyst at Mercury Research. "The financial people would be delighted to hear AMD would not be investing in any factories. They would be delighted if Intel would not compete on price to gain market share and would focus on margins. That's great for the next three quarters, but a train wreck for both companies."

Investors are idiots. R&D is what made these two companies great. It's something that will keep these two companies great.

As a side note to this. I use to be a die hard AMD fan, but with the dual core processor's released by Intel. My last purchase was an Intel. More bang for the buck. If the investors do not stifel AMD, I am sure they will be back with a comparable or better product. Intel needs AMD, just to keep them always looking to build better.