Amy,
it takes 3B (~AMD's revenue) to build a fab, not $1.5B.
AMD already built a fab (actually 2) for microprocessors. They just need to add some .13u equipment. That's where the billion will go. The rest (I am not sure if it is a 1 billion or .5 billion is going to new flash fabs built in joint venture with Fujitsu (which is self financing).
The next newest fab is planned for 2004, but it is still in a planning stage.
Sounds like AMD will be taking on some more debt in the future.
They may for the next fab, but probably not for the current capital expenses. If you paid attention last quarter, AMD actually retired big chunk of debt.
I expect AMD to fall further behind in technology, and this, combined with a capacity constrained envirnoment where cash is limited, could be a very, very difficult situation for AMD during the next uptick.
You are saying it as if AMD was behind in process technology, which is inaccurate. Currently, AMD cought up or actually gained lead in process technology that is in production. This is probably the first time ever this has happened. Of course I am not surprised at the arrogance of your post. It is common among Intel investors and employees. It comes from lack of knowladge, not from any evil character trait (I think).
Intel may (or may not) regain the lead with their .13u technology, but it is too early to tell how it will really work out.
I don't know where you get the stuff about capacity constrained environment. If there is any capacity constraint, it is only due to the fact that the P4 design takes twice the die area to achieve what the competing Athlon processor does. So (ignoring .13u transition at both companies for a moment) Intel needs to double the capacity just to stay even as the transition to P4 progresses.
Just something to keep in mind for Intel investors during the next "We will bury you" outburst. The billion of cap expenditures is actually a defensive move, to compensate for weakness of P4, not an offensive move.
Joe |
