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Politics : Formerly About Advanced Micro Devices
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To: Fred Fahmy who wrote (64964)7/12/1999 6:40:00 PM
From: Kevin K. Spurway  Read Replies (2) of 1580039
 
Re: "Why 25%?"

Did it ever occur to you that there might have been a method to AMD's madness--a REASON for the selected 25% figure? I think you now understand why some discount was--and is--appropriate. I'm sure AMD did a better market analysis than we're capable of and came up with the 25% figure that way. Whether it was the right decision in retrospect is doubtful, but hindsight is always 20-20. One thing I assure you is that Jerry didn't just wake up one morning and decide to pull 25% out of his *ss.

Re: "It's always nice to have as much volume as possible to spread over all your fixed costs (not just fabs)"

AMD has always made as many chips as they were capable of making. Last quarter should have convinced you of that.

Re: "it doesn't really do you any good if the net affect are huge losses."

Actually, it gives you the CASH FLOW to stay in business. Staying in business is generally desirable, particularly if you have a K7 in the works.

Re: "Perhaps they should have decided to be fabless until later in the game?"

If they were fabless they'd be begging IBM to build them a 300 MHz K6-2 right now. No fabless company has any hope of competing with Intel, and once you're out of the process game you're out for good. How many companies are you aware of in the last 10 years that have emerged out of the blue with top notch process technology?

Re: "I seem to hear this every year....have you ever heard this before?"

If AMD is operating in Q4 of calendar year 2000 with the same financial performance that they're operating at today, they're gone. Bought out for sure.

Kevin
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