@TG - Survive
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Anyone that things AMD is going out of business is day dreaming. They are a real enough competitor with real IP and real factories that even if they stay in the read and have to go back to the markets for billions of $'s, they will and the OEM's will support them and the markets will support them.
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I think we are on the same "wavelength" and mostly agree on
the main points, but I wouldn't rule that out, also when I
have to say, thats of course, very unlikely.
For me the biggest thread to AMD now is, that they show that
much arrogance. When I look at the loss in Q1, they clearly
said, that they were really disappointed and have to improve
things - thats the things which I at least expect. Now we
got another -600Mio. and what happened? AMD tried to say,
that they are in good shape. As a shareholder I would bite
me in my own ass, when I would hear that phrases. These
people cash in big bonuses and high saleries and don't seem
to recognize, that nothing changed, instead they speak the
given earnings in rosy colors. We have often pointed out,
that AMD needs at least 2100Mio in Revs just be show a black
zero - not more. This assumes, that GMs will go up in a sharp
way. If thats not the case, which I find highly likely, we
have to speak about 2300-2400Mio. per quarter. You are well
aware of the actual situation, but I'm really wondering, what
people think how long could AMD go on that way? After they
sold some more assets in the next two quarters, they will be
nearly "empty" and what should they do at that point?
The whole asset lite topic was bullshit all the time and
AMD made it clear at the TechDay, that they are far away from
being Asset lite on CPUs - that reason is clear. The need
the FABs and they need the newest nodes - no way around,
otherwise the existing Intel lead will even widen and every-
one could see what happens if your 20-25% behind in speed.
I don't want to think about a scenario where Intel holds an
even bigger lead - look at VIA.
At that point many things sum up. Your Revenue will go down,
margins will sink, losses will stay, you have to lay off
people, R&D has to cut back, new FABs are no option, newest
equip is much too expansive, the Intel lead will even grew
and a new circle begins ... at one point it will look very
grim. If this means Chapter 11 has to be seen, probably not -
AMD has a price, but the price would be much much lower than
many believe. Keep in mind, that the buyer (if ever) has to
pay down the debt, which will grow to new higher levels in
the future. I think that AMD will be at 7B debt in mid 2008.
At that point, their book value should be in 4-5$ region.
One sentence sums all up: the only thing which could help
to let AMD survive is a HIGH-BINNING K10. If they can't get
that piece clock high in heavy volume, they will run into
much deeper problems. If it gets that visible fast has to be
seen, probably not, but that CPU is the key, whether AMD will
be a second VIA in 2 years or the AMD from 2 years ago.
BUGGI |
