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Politics : Formerly About Advanced Micro Devices
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To: niceguy767 who wrote (82269)12/7/1999 9:35:00 PM
From: Bill Jackson  Read Replies (2) of 1574097
 
Nice, It all depends on whether or not they have signed long term low price contracts from back when we had a flash glut. the farseeing Japs and Taiwanese love to do this. they will lock a maker of ROMS or flash etc into a 5 year foundry contract at 90% capacity and the foundry jumps at it because they are running at 40% and having problems paying the bills. 2 years into it there is a shortage and they are free to sell that 10% left over capacity, but they speculator who committed for the five years then makes big money tax free as he sells it through an offshore sandwich company. Often the foundry makes more on the 10% they sell spot than on the 90% contracted. In addition some companies act ethically and do not sell above their list price. Of course their clients happily flood the spot market with resold parts. Many Silicon Valley and LA companies were built on this kind of action.
So at what price and with what long term committments has MAD sold the future outpout of Flash to assorted people? this will tell the tale on profits from flash. If they have a joint marketing arrangement with a japanese company you can bet the Jap company has comitted a huge % forward at a stable rpice. this will deprive AMD and help all the Jap customers cope with the shortages in flash. Tough, they say. Will jerry have been foolish/desperate enough to sign a locked in long term contrac like that? He may, who knows,
Do not misconstrue me, AMD will profit from flash but might miss those doubled prices and doubled volums if they are sold forward. Anyone here know any of these details?

Bill
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