Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 210.78

-4.8%

Dec 12 9:30 AM EST

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To: Bill Jackson who wrote (30914)	3/8/2001 10:53:48 PM
From: kash johal	Read Replies (1) of 275872

Bill, re: grey market / spot market etc. You make good points regarding disti's selling etc. One point is that Disti's service smaller customers, customers with credit issues and lower volumes in general. And disti's make 20-30 Gross margin typically on reselling these parts. High volume major accounts like an IBM, Nokia etc buy supplier direct. With annual contracts with some price collars etc. When they end up with oversupply they also dump into the grey/spot market etc. Every contract has CANCELLATION clauses in worst case. In addition every contract allows customer some right to reschedule except within a narrow window etc (ie 60-90 days). Just a 1Q shift can have devastating effects on a company. These contract customers are usually the "elite" customers and it is very rare that they are not allowed to reduce orders, shift volumes etc. regards, Kash

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