Since Intel released the Core 2 lineup in 2006, the Athlon64 X2 has failed miserably. The result is that AMD today sells the Athlon64 X2 at very low margins and Intel hasn't helped AMD's cause by creating a regular price war. This means AMD doesn't make profits as much as it should to run the R&D and fab maintainance/upgrade.AMD's desktop-variant, PhenomX4 will be released by year-end and will have to compete with Intel's Peryn CPU. The Peryn is not much of an upgrade but is a die-shrink of current Core2 Quad to 45nm (basically means smaller processor size i.e. die size). On the other hand, if we look at PhenomX4, its actually quite large compared to the current Athlon64 X2. In the processor world, larger the die-size, its generally accepted that the cost to manufacture is higher. This means that the cost to manufacture PhenomX4 will be higher than the current Athlon64 X2, while the cost to manufacture Peryn will be lesser compared to Core2 Quad. Now ask AMD to get into a price war with Intel!! Let's try to sell PhenomX4 at the price of Peryn!! For AMD, it'll mean even smaller margins than today while Intel can still keep its current margins for selling the CPUs.
The reason why this is a long-term issue for AMD because Intel is moving really fast in upgrading it's fabrication plants (processor manufacturing plants) to a smaller process, while AMD has already mentioned it needs some more time to upgrade. AMD also has a cash crunch, which means for the next upgrade, it needs some more time until its coffers fill again. So AMD is really not helping itself by releasing a larger-sized processor, but it may be the only option to survive the Intel performance assault!! Goodluck AMD!!