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Politics : Formerly About Advanced Micro Devices

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To: Jefferson Prescott Dewhurst who wrote (29181)	3/2/1998 12:58:00 AM
From: greg nus	Read Replies (1) of 1573435

dew drop in, some fresh money got sucked in here a little too early. The IBM deal is a deal by necessity for IBM. Ibm Microelectronics division employes 22,000 had had flat revenues of $7 billion for the last several years, $4 billion captive sales to IBM systems have been flat and $3 billion for OEM's like DEC. IBM now gets CPQ as a customer via DEC. IBM Microelectronics may loose Cyrix to TSM. Also the cyrix /Tsm foundry deal gives Cyrix tremendous leverage with IBM. So by necessity IBM made a deal with AMD. The AMD deal with IBM is not a good deal for AMD. A better deal could be cut with TSM at cheaper price. Unless AMD gets some additional cross liscense to other usefull IBM Patents critical to AMD. AMD does not need IBM CU technology AMD has it's own. An amd/Ibm chip with CU technology could bive AMD/Ibm a leg up on Intel as Intelhas no plans to leave aluminium untill aluminium has been fully exploited estimated to be 2years. Here is more cold water poured on the heard of those who think a IBM buyout of AMd is in the offing. The IBM enterprise model is looking more and more horizontal, similar to the modern hi-tech model described in Grove's book Parinoid, then vertical. The more vertical the more our outsource and depend on strategic for critical components. So sez Paine Weber. IBM also has a joint venture with Toshiba to develope 256 mb Drams but production is two years off. Is it coinsidential the AMD deal is for two years. If IBM was going to buy AMD would'nt the price be cheaper now than two years from now! Also with production not starting untill the TURD QTR. it indicates AMD process problems have not been fully worked out. I'm sure the deal is subject to a solution. This delay in production to the TURD Qtr gives Intel the window of opertunity to introduce Intel sub-1000 offering. Again placing AMD late to market behind an Intel offering. In short another blown oppertunity for AMD's inability to exicute on a plan, their plan. This is why its too early to buy AMD, especially in a hot market with alot of stocks showing boners on the charts.

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