|Thanks for the link. Excellent Reading.|
It is Intel's POV of course, but it clearly calls for adopting the simple rule that any single product "average pricing" above the "average variable cost" is legal.
Unfortunately for AMD that spells doom. As pointed out in this brief, Intel has a years advantage in introducing new manufacturing technologies, which give it a significant cost advantage. In addition Intel has the advantage of economy of scale, since the development/marketing/administrative costs are spread out over a larger volume.
For a few years AMD prospered when AMD had a superior design over the Prescott. Now unfortunately the Conroe/Penryn are better designs, and AMD is hopelessly lost. Nehalem will drive the design advantage even further. Intel will have superior performance products in all segments, which cost less.
AMD's salvation can only come if Intel stumbles again, or the market takes off and Intel is short on capacity. Asset Light is an attempt at lowering AMD manufacturing overhead costs, but I am skeptical if AMD can regain competitiveness by spinning out its Fabs. It needs significant cash infusion to sustain the present burn rate, and stay alive until a sunny day dawns.