Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 234.57

+1.2%

10:07 AM EST

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To: Joe NYC who wrote (148876)	1/24/2005 6:50:39 PM
From: THE WATSONYOUTH	Read Replies (2) of 275872

One would wonder why Intel would build 3 "spare" fabs in addition to the single fab that can supply the entire market for CPUs. Maybe the yields are less than world class. They want to insure that even a yield bust such as they experienced going to .18um will never in the future prevent them from supplying at least 85+% of the market. That last fiasco let AMD capture 22+% share and make several hundred million profits for several quarters. Had that not occurred, AMD would likely have gone under by now since Intel would not have given up that amount of market share at any cost. This also allows them to introduce the next process generation much sooner than necessary since they don't have to be concerned about low initial yields. Thus, it is insurance against the two scenarios (limited production and late or equal next generation). Of course, this comes at a very steep price. But, it will keep AMD in check and keep any yield/production issues under wraps. Got to keep that myth alive at any cost. THE WATSONYOUTH

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