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Politics : Formerly About Advanced Micro Devices
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To: Tenchusatsu who wrote (40324)10/30/1998 1:54:00 AM
From: RDM  Read Replies (2) of 1573500
 
I expect AMD to 5 to 10 Million CPUs per quarter next year at an ASP of $150 or higher. Currently Intel is attempting to freeze AMD out of the market by price bombing the low performance end of the market.

AMD should close the gap on Intel's current speed advantage making it more difficult to price bomb the low end without hurting their own revenue. Many analysts are expecting a significant increase in CPU consumption next year due to Y2K. If AMD ships 7M 600 Mhz K6-3 during Q4 99 at $150 they will be doing $1.35B in sales, making $1.50 per share profit and stock selling at $120 per share (20 times earnings). The PC market could be at 30 M per quarter CPU rate meaning that AMD still "ownly has 23% share".

AMD does not need to kill Intel to win big. Current CPU chips drop to $90 quickly because they only cost $30 to build. Future chips such as K6-3 will not drop as quickly because they will cost more ($70 ?) to build due to the large area used by cache. Using .18 will eventually drive the cost down. I believe AMD stock price is more likely to go up in the short term with Intel than to prosper from Intel failures. If Intel fall Wall Street will say that the PC market is tanking before the would credit AMD.
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