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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 214.68-0.1%10:42 AM EST
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To: f.simons who wrote (4846)8/13/2000 4:34:25 PM
From: andreas_wonischRead Replies (1) of 275872
 
Frank, Re: They are also replacing $1200 1 gig AMD chips.

AMDs ASPs were in the low $90 range last quarter. All Thunderbirds (even the 700 and 750 MHz models which aren't produced any more) are priced above $90. So why should AMDs ASPs suffer from the price drop? They just need to drop the prices to create more demand for the high speed parts (which Intel can't deliver) and to phase out the low speed, low margin parts. IMO a very logical and good strategy.

Even if AMDs ASP stay flat this quarter (which is IMO nearly impossible because of the 3.6 Duron/Athlon parts) they would earn roughly $60 million more from their microprocessor business alone because they plan to sell ca. 700,000 units more. But if we assume that the 7th generation processors (ca. 3.6 million units) are sold at an ASP of ca. $150 (very low guess) and the K6s ASP stay flat at ca. $50 we have ASPs in the $100 range. And that would mean another $70 million in earnings...

And now let's imagine what AMDs ASPs would be if they succeeded in creating so much more demand at the >900 MHz range and selling there >1 million units... Do the math for yourself, it would mean killer earnings.

Andreas
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