Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 246.76

-0.5%

Nov 14 3:59 PM EST

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To: Mani1 who started this subject	4/17/2001 3:29:10 PM
From: AK2004	Read Replies (1) of 275872

<font color=blue>intel's deeper price cuts in 2nd week of May when it rains...... 01:24pm EDT 17-Apr-01 Credit Suisse First Boston (Mano, Jonathan (212) 325-453 CSFB Tech Intra-Daily - April 17, 2001 FBC CSFB Tech Intra-Daily Tuesday, April 17, 2001 Jon Mano (212) 325-4530 www.tech.csfb.com RESEARCH UPDATE Intel Corp. (INTC-$26.30-Cap $184B-Hold) Charlie Glavin, 415-836-7715 Intel Price Cuts Further Aggravate Margin Pressure CQ01E: $0.14; CY01E: $0.56 * Intel made another round of price cuts, primarily to motivate customers to migrate from the P3 to the P4. * We continue to believe margins will continue to deteriorate through the end of 2001 into the mid-40% range. However, the primary reason is not pricing but manufacturing issues - both a lower utilization rate and a higher percentage of P4 being built on a 0.18u process (causing a 130% higher die cost). * Today's price cuts only aggravate the situation. We also believe Intel will institute another broader and much deeper set of price cuts the second week in May. This reflects comments we have made since we downgraded Intel last October: Intel is in the midst of a price war and with a lack of new products or killer apps, it can only fight with one lever-pricing. * We believe when INTC reports 1Q01 earnings this afternoon that it will guide for sequentially down revenues for 2Q (a quarter that even in good times has the worst visibility) and for lower gross margins. * We also believe there is a 50% probability Intel will lower its capex projections. While Intel debates internally as to whether it lowers guidance today, our contacts indicate that equipment vendors have already been told that not to expect spending to be any higher than $5.5-6.5 billion this calendar year.

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