[citation][nom]Anonymous[/nom]So basically going the foundry is actually going to DECREASE Margins. You have to absorb the foundry profit/margin and you have a competitor which is not paying a middleman, so it will be harder to compete price-wise without reducing margins.[/citation]
Not necessarily. You make your money on SALES. And SALES is driven by EMOTION. I mean, let's face it, ignoring R&D cost up front, what is the margin on one of Intel's "Extreme" processors?? They sell it for $999 when it costs probably only a few percentage points more to build it (again, ignoring overhead upfront per unit) than a processor they sell for $100. And AMD started that nonsense with the FX series processors. 20% more power for 200% more money.
If they can set up a good workflow of design and then have a highly streamlined, efficient manufacturing partner, they stand a chance. It's better than going into perpetual deficit.
If you've ever worked for a large company, especially one that suffers from poor management, you come to realize that massive inefficiency and disorganization can run rampant and here's why: upper management are idiots, so then the best of middle management and skilled people get fed up with it and they leave to work for the competition. And it goes down the line from there. If a company that's gone into massive inefficiency and that's lost its edge wants to compete, it needs to change the way it does business proactively.
It needs to get back "consumer confidence" so that people, even we technogeeks, will buy those CPUs and GPUs on emotion, pay the extra for the deluxe model.