Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Kristin mikel seeds who wrote (31324)	4/7/1998 8:57:00 PM
From: Richard Tuck	Read Replies (4) of 1582527

Kristin, I feel the same way about AMD, having owned it twice over the last few years. Jerry Sanders is a salesman at heart and knows how to put the best spin on things. Thus I would never bet on AMD ever outperforming his predictions! As for AMD selling 15 million units, it is quite possible. Remember that is only a 15% market share. The $64 question is whether the Intel brand is strong enough to sell Intel's low-end Celeron line. All indications are that the K6 is a superior chip, so the Intel brand image and competitive pricing will have kick in for Intel to gain back low-end market share. Unfortunately, Intel cannot compete with old parts because anything made on the 0.35um process will soon be less cost effective (due to larger die sizes) than the 0.25um parts. You can be sure that Intel will try to put heavy price pressure on AMD to try to keep AMD's ASP's down in the $100-150 range. This will canibalize Intel's PII business and cut Intel's margins further, however. If AMD can withstand this and really take advantage of the 0.25um K6's small die size, Intel may be forced to reconsider. The K6 will survive for at least a year or two in one of its successor versions, the K6-3D and K6-3D+ which will be competitive (or superior) to Intel's offerings at the same speed grade. The K7 should be superior to Intel's Katmai next year and will probably be made on IBM's 0.16um process. The recently announced NSM chip will not be out until next year. By that time it will be like the MediaGX chip, a day late and a dollar short. I just don't believe in trying to integrate the entire computer circuitry (excepting memory) into a single chip; it usually results in a large die size and obsolete functionality. Anyway, the bottom line is that IF AMD continues to improve 0.25um process yields quickly, they should be able to make significant inroads into Intel's market share. They have the die size advantage on Intel, but Intel's pricing will keep AMD from earning that much in 1998 or early 1999. I think both stocks are poor investments at the moment (though AMD may go up for a while based on optimism over the improved yield picture). I appreciate you asking for my opinion ... Richard

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