Advanced Micro vs Intel (AMD / INTC) Message Board

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Technology Stocks : Advanced Micro vs Intel (AMD / INTC)

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To: Elmer Phud who wrote (2542)	1/10/2008 3:37:46 PM
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It will be 2009 before the other fab is converted. It was my understanding that the Fab would be converted to 300mm incrementally and that production would not halt. Are you saying that the conversion that is underway will not be complete until 2009??? If so, that was my understanding as well... They have only 1 fab Again, I was under the impression that Fab30 would be operational during the conversion and that lines would be brought down individually and converted. Maybe I'm misunderstanding what I've read... However, if this is in fact the case, then, doesn't production increase as each new 300mm line comes up?? Do you realize you're describing their current strategy? Yes... I agree with the current strategy... What would you do differently assuming that they are executing as well as they can? Given Intel's significant financial and manufacturing resources each processor that AMD sells takes a processor sale from Intel. It also creates a potential chipset or graphics card sale for AMD. This is the difference between life after ATI and life before ATI. Prior to ATI, not making any money on a CPU lost the company 100's of $millions as you note. However, after ATI, each CPU sale has the potential to generate an additional $25 to $100's in additional sales. AND, it hurts Intel at the same time... And what's even better is that chipsets and graphics cards aren't part of the X86 agreement so they can outsource as many as they want. Given the X86 settlement between AMD and Intel, the ONLY hope AMD has of continuing to exist as a company is to somehow steal sales from Intel and capture as many incremental chipset/GPU sales as possible. This strategy would allow AMD to limit Intel's ability to print money and hopefully start to level the playing field... But here's a twist that should make Intel think twice... After the conversion of Fab 38, what if AMD discovered that they could actually breakeven without making any money on CPU's??? What if GPU sales and chipset profits were enough??? Given that Intel doesn't sell discrete graphics cards, could Intel afford to sell each CPU at just over cost and survive??? Wouldn't it be interesting if AMD did to CPU's what Intel did to Flash??? Scott

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