Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Jim McMannis who wrote (29447)	3/4/1998 12:59:00 PM
From: Maverick	Read Replies (1) of 1572208

AMD will likely miss EPS estimate of -$0.19 in March qtr for several reasons: 1)wireless chip demand and therefore flash is down significantly in Asia as manifested by VLSI earnings warning. 2)Although the K6 yield was improved very recently on some pilot lots, it wasn't improved soon enough with enogh lots for AMD to be profitable this qtr. 3) R&D expense increased dramatically trying to improve the K6 yield. 4) There is no indication that there is a good wafer yield from which dies are made. It would take a combination of good wafer yield and die yield to make money. The IBM deal will help ensure an ample supply of good wafers in 4Q98. 5) 1st qtr is seasonally weak for AMD. The same is true for networking cos who may cut back on NW ASIC demands. Thus, an earning warnings can hit the wires late March or early April. In order to be a good stock picker we need to continuously challenge our investment assumption. Right now, I still remain cautious about AMD's short term despite a more promising long term prospect.

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