Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 237.57

-2.6%

Nov 11 3:59 PM EST

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To: AK2004 who wrote (12627)	10/10/2000 6:39:25 PM
From: Charles R	Read Replies (1) of 275872

Albert, <-ASPs could become a big problem. Weakness in PC demand plus increased potential for processor oversupply in Q4/Q1 is a recipe for lower ASPs, which means lower margins. While we believe Intel is better positioned longer term in this battle, and with much of this dynamic already in both stocks, we would rather take a wait and see position on both INTC and AMD in the near term.> Intel clearly is better positioned for longer term but what crap! The only one who is going to get hurt in a price war for the next few quarters is Intel. AMD's ASPs may not increase much as a result of price war but Intel's ASPs will positively collapse. Intel has no meaningful response if AMD cuts 1G price to about $200 this quarter and that will not materially impact AMD ASPs. <- In fact, in the last week, we have seen rapid deterioration in the spot market prices of AMD's Thunderbird processors, which declined between 3% and 23% from the previous week. This compares to a more typical week over week decline between 2-4%.> One more guy who does not understand the mechanics of MHz ramp and market share drive. And, this is coming from someone who apparently worked in this industry. <In addition to a possible glut of high-end processors, which on its own is cause for concern, we believe AMD's low end Athlon/Duron is a clear hit in the consumer market. We expect this product could be the low-end processor product to beat in 2001. However this success could turn out to be a mix problem for AMD given that more sales of Duron relative to the higher end Athlon/Thunderbird may take a toll on AMD's overall ASPs. Remember, the critical issue for AMD in 2001 is not necessarily manufacturing execution (we believe they will execute), its corporate market acceptance for the Athlon, which the company in general has never been able to obtain. AMD needs to penetrate the corporate market in order to achieve a more diversified end-market base which in turn leads to more stable ASPs and we are not seeing evidence of much success on this front. > Amen! This is the most well written part of the report. Chuck

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