Could theRegister at some point write a background piece on processor pricing? I do not see how this works out, given physical laws of diminishing returns.

How can a 7% speedbump 2.8-> 3.0Ghz justify a 42% price increase 1500->2100$? We're not speaking irrational or exquisite spending on a slightly better rare wine, but about the commodity called processing power. Given that a 7% faster processor will not give you much more than a 3% faster end product (or does it?), how does this work? If the 3% faster end product is only 2% more expensive, after this 600$ extra spending, then it makes sense probably. Any insights?

I think that this is good news for everybody. Intel is not likely to fall behind AMD again willingly, so I see processor speeds increasing on both sides of the fence. Good time to be a computer user.

AMD has been marketing the ghost of Opteron future (Barcelona) for about six months. It needs to sell what is on its truck.

Opteron is pretty good against Woodcrest today. In many areas Opteron performance is solid or better than Woodcrest. There are others where Woodcrest has no or limited benchmark results, such as TPC-H and SPECjAppServer.

Opteron also outperforms Woodcrest as a VMware virtualization platform. See:

http://www.lionbridge.com/competitive_analysis/reports/amd/AMD_Virtualization_Performance_Analysis.pdf

Clovertown only provides a 1.3X to 1.5X improvement on many workloads, the exception being workloads which are highly threaded and can reside in cache, like SPECjbb. Most customers I deal with are not buying Clovertowns, but are buying Woodcrest over Opteron.

AMD should never have lost one point of market share to Woodcrest in the HPC market. Opteron floating point performance is solid compared to Woodcrest, Barcelona, with four floats per clock, will be stellar for HPC, and the whole "hybrid computing" concept behind the ATI acquisition is well-suited for HPC. But AMD just completely dropped the ball.

AMD could have easily pidgenholed Clovertown into a niche, and positioned it as the equivalent of the Pentium Ds of a few years ago. Then it could have picked its fight with Woodcrest on its terms. It could have clearly attacked Intel's Tulsa XeonMP chips, especially in the VMware space.

Instead, AMD chose to sell futures. The problem with selling futures is they don't generate revenue. And now AMD has to deal with all of the negative press due to its financial performance.

AMD doesn't try to make faster or slower processors and charge more or less accordingly. They always make the best chips they can. A certain percentage of the chips coming off the assembly line will run at 2.0 GHz, a certain percentage at 2.5 GHz, etc. A very small percentage can run at 3.0 GHz. If AMD charged by the GHz, their limited stock would sell out and they would be left without that product. Thus, asking why 3.0 GHz chips cost so much more than 2.8 GHz chips is kind of like asking why a 2 karat diamond isn't twice the price of a 1 karat diamond.