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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 221.450.0%Dec 11 3:59 PM EST
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To: hmaly who wrote (4850)8/13/2000 8:28:55 PM
From: Charles RRead Replies (3) of 275872
 
Harry,

<In AMD'S case, a delay in chipsets caused a delay in revenue from 2nd q. to 3-q or 4-q. Big deal, the revenue will eventually be recorded. >

This analysis is quite wrong. AMD lost those sales for ever. A chipset problem free ramp would have been about 7-7.5Mu in Q2, 8-8.5Mu in Q3, 10+Mu in Q4. Instead we got 6.3Mu in Q2 and are likely to get 7Mu in Q3, 9Mu in Q4. Several hundreds of millions of dollars in lost revenues and profits which AMD will NEVER get back. This is BIG deal.

<AMD is still producing a large amount of high mhz chips;(look at the availability on pricewatch) and it is only natural to lower the price to stimulate sales.>

Frank makes a point about aggressive pricing affecting the stock price and Frank is on the mark. AMD will gain market share as a result of the drop and that will help AMD make up for some of the lost sales from Duron. But a lot of people may not see it that ways. It is all about perceptions in this business and some folks out there perceive the price drop as a price war that will kill AMD.

There is also a chance, however remote, that a mild price war could develop especially if the demand slows down.

Chuck
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