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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 213.43+6.2%Dec 19 9:30 AM EST
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To: Milan Shah who wrote (88129)9/15/2002 1:17:11 PM
From: Dan3Read Replies (2) of 275872
 
Re: AMD is back to its normal ways

I think the present problem is more due to Intel having been able to pull in its roadmap by between 1 and 2 quarters, than anything else. As a result, AMD has been forced to scramble to push Athlon XP ahead, and AMD simply doesn't have the resources to do a priority acceleration of Athlon XP while simultaneously launching a new chip on a new process.

Intel accepted a $5 Billion loss last year (look at what happened to their working capital) in order to execute a one-time roadmap acceleration. Intel effectively (though they've hidden it on paper) threw away billions in 1 to 2 year old FAB investments to gain 3 to 6 months on AMD. As a result, AMD has been forced to back off some of its new initiatives and focus on keeping its core Socket A business strong.

This wasn't so much a failure by AMD as it was a very strong (if very costly) action by Intel.

Intel has been talking big about dumping their current FAB configurations for 90 nanometer production within a year, (which would lead another big working capital loss) but slashing their capex forecasts almost monthly as they try to maintain paper profitability. Intel's capital reserves have gone from huge to very large. Another push like the one just completed would take their reserves down to limited - which would eliminate the best thing they've got going for them as a corporation.
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