Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 252.58

-2.7%

1:56 PM EST

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To: Tenchusatsu who wrote (243199)	11/1/2007 9:13:08 PM
From: pgerassi	Read Replies (1) of 275872

Tench: I didn't run away from my statement. If the capacity problem was not temporary, like a wrong wafer mix or a yield hiccup (it happens), then the solution can be a long time in coming (equipment purchases (current production lines can't process enough wafers), redesign for better yields, etc.). Frankly I think it is most likely some temporary screw up like miss estimating demand and not starting enough 65nm wafers. Something like a bad mix of products is less likely as many of those that are short can go into many different packages (Xeon server, Conroe desktop or Merom mobile) and that packaging can be changed late in the production cycle. It won't take but a few weeks to place more good C2D dies as Meroms rather than Conroes. I also think that such demand surges and sags will occur more frequently for Intel as past actions that made orders more predictable are no longer allowed which leads to more unpredictability of demand than in the past. Also actions that allowed undesirable inventory to be swept under the proverbial rug aren't allowed either which magnifies shortages and overproduction wrt to the past. Thus when Intel could force OEMs to order 6 months in advance and keep quite a bit of inventory virtually shuttling between it and some OEMs with interleaved reporting periods. That meant that demand was quite predictable and the only spikes came from medium period production glitches (extra silicon spin needed in a new product or yields not as high as expected). Without that demand leveling available, Intel will suffer more during demand surges and sags. Not that they mess up more than in the past, but that it will be more visible now when they do. Pete

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