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Politics : Formerly About Advanced Micro Devices

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To: Dan3 who wrote (109585)	5/6/2000 4:41:00 PM
From: kash johal	Read Replies (2) of 1575761

Dan, re:": 1M Xeons at $800 ASP = $800M 2M Willamette at $750 ASP = $1500M 20M PIII cumines at $200 ASP =$4000M 9M celeronII's at $80 ASP = $720M 10M timna/mb at $80 ASP = $800M Interesting numbers. I think that your ASPs are a little high, but not by much (and that's just a WAG on my part anyway). And Intel will probably ship some Itaniums in this time frame, too. Have you considered that, along with the new production capacity that you are taking into account, have come the additional expenses of operating and amortizing that new capacity? (Is it 3 new FABs by the end of the year?) Costs were $6 Billion in Q4 of 99 (how much of that due to CPUs is not known), now new FABs must be operated and paid for, together with a 30% increase in material and labor costs - since this forecasts growth from around 32 to 42 million units. What will happen to expenses under this scenario? What will profits be?" Dan, as I look at the Q4 numbers I see Intel being very agressive if Willy comes out on schedule. If willy misses and then Intel is in a world of hurt as Tbirds will smoke the PIII's. Your questions apply to AMD as well. They will be gearing up HUGE volumes upo to 8M units for Q4. The wafer starts will have to ramp in july/august to ensure adequate Q4 volumes. We may well have an oversupply situation with attendant price cutting which will be BAD news for both stocks. If demand keeps building then Both companies do very well. I am just raisng the fact that there are some questionable roadblocks to AMD - and by no means is it a sure thing. regards, Kash

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