Gary Re... The simple math seems to suggests AMD COULD be technically bankrupt in a year?!!
Under the right circumstances, anyone could be bankrupt within a yr. How many of us aren't one banana peel away from getting sued for everything we have. There is a huge difference between could be and will be.
For one thing, in the warning, AMD specifically stated, they made a payment of approximately, 430 million for Dresden, and still maintained their cash balance at 1 billion. Anyone in business, especially seasonal businesses like mine, knows that cash is king, and having a great quarter during prime time will be offset by a losing quarter during down times. Now is the semi's off times, compounded by a off yr. Nothing lasts forever, and this slowdown will pass. It isn't like the computer has entered the horse and buggy era. Computers will still have to be replaced every so often, just not as often. And the growth in semi's is away from computers, and toward moble PDA's and other electric gadgets. Plus the computer market has hardly had the wringing out of excess surplus, such as the cell phone and flash market has had. Perhaps, that is happening now.
At any rate, AMD didn't lose its cash balance, and that is important. That isn't to say the loss of revenue can be minimalized, but it does need to be put in perspective. Once Hammer is out, AMD could easily cut back on engineering etc, to save costs; however that would mortgage the future. My bet would be more UMC or TSMC type of ventures, and an increase of emphasis on flash. Wait out the CPU downturn and be ready for the uptick. In the meantime, I hope to be able to buy more at $6. If you wish to sell, I am buying at that price. Who knows, it might be your last chance to jump. |
