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Politics : Formerly About Advanced Micro Devices
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To: vince doran who wrote (72037)9/16/1999 4:59:00 PM
From: kash johal  Read Replies (2) of 1573216
 
Vince,

Re: "AMD as an investment"

Well my view on AMD as you know is bullish.

Having said that I think you are focussing on the wrong issues : Q4 should be damn good as they should easily sell the 1M K7s and perhaps eke out a profit.

And the impending release of Athlon Ultra's will start to help AMDs market positioning when it blows the Xeon/Cascades out of the performance workstation sockets.

But there are 2 major problems on the horizon for AMD starting in Q1 2000:

1) K6 replacement.

The K6 is dead and once the coppermine with 128K cache comes out from Intel, AMD stops having a competitive low end processor IMHO.

There has been talk of an AMD Athlon socketed version to compete with this. However AMD MUST have the 0.18 micron version of the AThlon in volume by Q1 2000 to compete with this IMHO.

2. This brings us to the BILLION dollar question surrounding AMD ie dresden. We know that Dresden already is up to 800 folks (or half of its full employment). They are sitting there with their thumbs up their assess right now. If dresden was an AL fab these guys would be cranking product well before NOW.

If Dresden comes up by Q4 and start producing some AThlons for Q1 shipments or AMD is in a world of hurt by Q1 2000.

If Dresden doesn't yield etc we will have a MAJOR disaster and I can see the stock tanking into the teens.

Of course if Dresden ramps better than expected we could have volumes in Q4 helping the K7 volume ramp and get AMD dramatically profitable by Q1 2000.

Personally I have written some calls to give a hedge. If the stock rallies to high twenties prior to earnings with all the Ultra hype I may even buy puts.

I don't think this is a stock one can buy and put away for a period of time. But it sure will make an exciting 3-6 months.

regards,

Kash
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