Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 231.83

+1.7%

Jan 16 9:30 AM EST

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To: wanna_bmw who wrote (59201)	10/18/2001 8:36:02 PM
From: combjelly	Read Replies (1) of 275872

"AMD will have to face up to the fact that their core CPU business has become unprofitable for them, which is even worse than a downturn in flash, IMHO." You are counting two different things. AMD's flash is profitable in the sense that they are selling their output for more than the cost of production. But if the flash is required to amortize the cost of the fab also, it lost gobs of money. AMD's deal with Fujitsu is written so that they get the chips for basically the costs of production, AMD supplied the IP and Fujitsu supplied the fabs. When sales are good, both companies make out like bandits. When sales are bad, Fujitsu takes it in the shorts. That is why AMD bought the Gresham fab from Fujitsu. AMD's core CPU business is not profitable because the Dresden fab is not ramped up, but AMD still has to pay for it and the fixed costs of Fab25 also, which is producing flash, Durons and whatever else. It is the fixed costs that led to the loss in Q3. Now with the Athlon XPs on the market, they have a good chance of erasing that deficit.

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