Advanced Micro Devices - Moderated (AMD) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 213.43

+6.2%

Dec 19 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul Engel who wrote (1971)	7/23/2000 12:46:31 PM
From: Dan3	Read Replies (1) of 275872

Re: You clearly haven't gotten the word yet !!! AMD's ASPs were about $93 last quarter. You've brought up a very interesting point regarding CPU ASPs. Intel has long kept these a mystery, while hinting at numbers over $200. This quarter, the IAG had sales of about $7 billion for about 30 million parts. If they sold 10 million motherboards at $100 and 20 million chipsets at $30 then non CPU sales were about $1.6 billion leaving ASPs at $5,400 / 30 or $180 (very rough calculation, but likely pretty close). Now if we subtract a million Xeons at $1,400 each (another rough estimate, can you provide better guidance?), we get $4,000 / 29 or $138. Given that AMD cpu pricing on Athlons has had to compensate for motherboards that were typically $40 higher than Celeron/K6/Pentium motherboards, ASPs in the markets where AMD and Intel compete are getting a lot closer. This has all been while the only numerically significant competition faced by Intel has been from the K6. But from this quarter forward, Duron and Athlon will each be available in multi-million quantities for the first time. At the same time, integrated chipsets and motherboards for Socket A are finally coming to market removing AMD's need to subsidize motherboard costs with lowered CPU pricing. But AMD has made it clear that they do not expect their ASPs to increase by more than $10 or so. Meanwhile the motherboards supporting the AMD CPUs that provide direct competition to INTC CPUs will drop by about $40 in price leading to a net decrease in CPU/Motherboard pricing of about $30. So I expect there is a good chance that INTC will have to make up a good chunk of that difference by dropping its price on each of 29 million CPUs by $20 - maybe more. This would lead to a direct decrease in both operating revenue and operating profit of $580 million or more and could easily take IAG operating profits well below $3Billion. At the rate the rest of INTC continues to increase its quarterly operating loss, quarterly operating profits for INTC could easily move into the $1.5 to $2 Billion range or lower - a fabulous number, but is it one that can support a near half trillion dollar valuation? Especially when the earnings trend is down rather than up? Dan

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next