AMD just can't and will never be able to compete, they don't have the FABs nor capacity to mass produce and to make matters worse, their FABs are in an European country where labor is real expensive (not India nor Israel).
Even a lot of people have noticed th shortage on X2s and A64. So to this date, they cannot keep up with the demand and the demand only keeps getting bigger and bigger and bigger.
So here are a few facts that Intel released back in 2005 and to this date, they still hold true:
In a statement filed with the U.S. District Court in Delaware, Intel said "AMD's complaint presents a case study in legal dissonance. Although AMD has purportedly brought its complaint to promote competition, its true aim is the opposite. Under the cover of competition law, AMD seeks to shield itself from competition. AMD seeks to impede Intel's ability to lower prices and thereby to allow AMD to charge higher prices. AMD's colorful language and fanciful claims cannot obscure AMD's goal of shielding AMD from price competition."
Remember the X2 3800+ for $500? Now what? $130.....LOL. Intel's middle-heavy weights never went down that drastically in price. If I can recall, AMD is being sued as well by some other company because of this same "practice". Go figure, everybody sues each-other.