AMD pricing itself into a black hole with the Thorton

IF AND WHEN AMD'S new AthlonFX "Thorton" goes on sale - and it's not yet certain if that name is anything other than a marketing doodle, it's unclear where the chip wil fit in the pricing scheme of things.

The story is that the "Thorton" will be available at speed grades between 2000+ and 2600+ model ratings.

In terms of its performance, the chip should be identical or just slightly slower because of lower cache-associativity than Thoroughbred, but how AMD intends to make any money on this new chip remains a mystery.

Consider Intel's price structure: A Celeron 2GHz, perfectly capable for all sorts of office tasks and tolerable for gaming is for sale at $69 in retail packaging.

Even the 2.6 GHz model can be had for as little as $126, and considering how well most Celerons seem to overclock, this is just a milch cow for the chip giant.

The Pentium 4 is a very different story. A P4 2.4 GHz "C" costs $171, and the 3.2GHz model, if you simply must own one, could set you back as much as $700 retail-boxed, according to current prices from newegg.com.

The price and performance delta between the Celeron and the Pentium 4 has allowed Intel to take even its lowest-common-denominator processor and toss it out the door at a low price, take a small margin, and provide the market with a processor with acceptable overall performance.

Now, in comparison, let's look at AMD. A retail-packaged AthlonXP 2000+ sells for as little as $62. A retail Barton 2500+ costs $92. AMD's line finally takes a jump upwards at the 2800+ mark, with Bartons at this speed costing $171, while the Barton 3000+ costs $244 and the 3200+.

AMD has priced its existing AthlonXP processor line to be hyper-competitive against Intel's Celeron division, obviously hoping to re-stake its claim in some of the budget systems that were once the mainstay of the market. With prices already so low, that average selling prices have dipped as low as $40, AthlonFX or Mr Thorton isn't in a position to improve AMD's margins at all. There's no margin room to work with, as the AthlonXP line is smashed too firmly in the budget range.

What the Thorton might do is to allow AMD to cut costs and improve wafer yields. Because AthlonFX has a disabled cache block, AMD can now take CPU dies they were previously throwing away because of defective cache and "recycle" them into AthlonFX's, much as Intel has always done with the Celeron line. Only AMD knows how much this will actually help them, but Sunnyvale must be straining at gnats to cut costs anywhere it can as the year rolls on and the black remains elusively out of sight.

With Athlon 64 coming soon and AthlonXP slipping ever-farther into the budget range, AthlonFX may not be long for this world, if indeed it ever enters this world. µ