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Technology Stocks : Intel Corporation (INTC)
INTC 45.51+10.7%Jan 9 9:30 AM EST
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To: willowy who wrote (182765)11/24/2005 11:19:58 AM
From: Dan3  Read Replies (1) of 186894
 
Re: Questions:

1. If AMD is taking so rapidly market share in "the very most profitable business" how come their ttm net income is only $40M on $5.3B revenue?

Last quarter AMD's CPU business made $209 million on sales of $969 million. In the previous quarter, they made $110 million on sales of 4767 million. Over the past year, Intel entered the low end NOR market, driving prices down substantially, which has acted to mask the dramatic gains of AMD's CPU business.
amd.com

2. Is it not of a concern to you that doubling manufacturing space would increase their expenses quite significantly, potentially wiping out any possible profit if not bringing the entire business into red area again? Don't you have any concern?

Look at the profitability increases AMD is seeing as gains ground in segments other than entry level retail systems (which it was limited to, in the past). AMD is presently making a big push into the mobile market, as well. AMD's Turion brand is starting to make headway against Pentium M, selling at much higher prices than Mobile Celeron or Mobile Sempron. Check out the pricing of notebooks in today's Best Buy flyer (and those from other retailers).

At the present time, the only thing holding AMD back is capacity, and that will be changing next quarter.
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