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Politics : Formerly About Advanced Micro Devices

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To: Paul Engel who wrote (26727)	12/14/1997 12:54:00 AM
From: greg nus	Read Replies (2) of 1576346

Paul Engel, For an intellegent guy this is one time you should think befroe you type. Intel protecting it's market share deals AMD a financial blow. Why would Intel drop is prices enought to loose a billion in revenue... resulting in a 30% correction in it's stock price. The $30.00 correction * 1.6 billion shares just cost Intel a cool $48 billion in market valuation. No one is that stupid! Nor would any marketing VP keep his job very long folowing such intentions. Intel as market leader follows a pricing policy tied to production consistent with unit volume growth... It is only natural to drop prices as production ramps up. remember in the last year Intel has released two generations of new chips which they had to learn how to make. Undoubtly this qrt they are making more than last qtr. As early as last July they sold into a weaking world market(non US sales)...Sales were off in Europe although now showing some improvment are still weak. Sales are off in Japan.. Asia..Non China... ..AMD is the last of Intel's worries, considering AMD's hsitory of blowing itself. AMD is scared to price in parity with Intel. AMD price as a percentage of system cost @ 8.1% vs 25% for Intel proves the point. AMD continues to try to compete with Intel "head on" as opposed to using Gorilla warfare, taking a byte out of Intel when and where it can. They do this even thought AMD ultimatly lacks the financial wherewithall to ultimatly win by following such a policy. Furthermore much more importantly AMD has no immeadiate plans for cash conservation (usterity plan) until it returns to profitability. An traditionally Sanders does'nt even come in to work during December. going forward AMD faces solving yield problems, Fab 25 convertsion to .25u and resulting comercial quantity rampup with the .25u version and the completion of the Dresden fab. They will have to face forign currency translations risks on the sales they can make to Asia. AND yet another round of earlyer than expected price cuts from Intel. Are these enought reason for Intel not to worry about AMD?

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