Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Charles R who wrote (80458)	11/19/1999 2:01:00 AM
From: Mani1	Read Replies (2) of 1581234

Charles, Kap and Dan, I am fairly sure that when AMD says break even is $850 Million, that means that every dollar more than that is 100% profit. AMD already knows what it would cost to run their fabs at full capacity, pay all the employees and the rest of their cost should come out to $850 million. Of course they do not know what yield and ASP they will get, and how many they will not be able to sell, so the revenues that will be generated from that fixed cost of $850 million is unknown. AMD does not vary the wafer through put of their fab based on market conditions, mother-board availability etc, so their cost is "fixed" for now. Again, I am fairly confident that every Dollar over "break even" is 100% net margin. Taxes of course will be zero resulting in direct increase in the reported earnings. If AMD riches $950 million (that is 150 million higher than sanders mentioned!!!) we could be at $50. Highly doubt it. Mani

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