Cancellation explained:
Naturally when something like this happens, one assumes AMD is having CPU production problems again, but this article provides reason to think otherwise.
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SAN FRANCISCO--Advanced Micro Devices abruptly canceled appearances at two securities
conferences today, a move that has ignited some speculation that the company may be
trying to sell its Vantis division.
The prospect of a Vantis sales comes amid slow growth from the division and yesterday's
resignation of Rich Previte, Vantis chief executive officer.
Vantis is a wholly owned subsidiary of AMD dedicated to integrated circuits for the personal and
networked computer and communications markets. Although Vantis contributes about 10 percent to
AMD's revenue, sales have been relatively stagnant for a number of quarters.
AMD was slated to appear at the NationsBanc Montgomery Securities conference here tomorrow
and at the similar Goldman Sachs & Company conference later in the month. Today, however, AMD
canceled appearances at both conferences without providing an explanation.
While a number of analysts guessed that the cancellation may be related to Vantis, AMD may
merely be regrouping to take another look at its strategy for competing against Intel, said Charles
Boucher, semiconductor analyst with Donaldson, Lufkin & Jeanrette. Intel has increasingly become
more aggressive in its pricing in 1998, he said.
Intel has also been moving its product releases forward in time. A 433-MHz Celeron chip will come
out next month, for example, while a 466-MHz Celeron will come out in May, said sources close to
Intel, faster than earlier road maps.
Additionally, Intel will likely start shipping a few chips based around the more
advanced 0.18-micron process in the second quarter, a move which could
allow Intel to start putting out cheaper, more advanced chips to market
quicker than earlier expected.
"AMD is facing a competitor than is ratcheting up its clock speed at an
accelerated rate," he said.
The cancellations, of course, may be coincidental to any of these
circumstances.
news.com
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With the timing of the Vantis CEO resigning and this cancellation, the best guess is obviously problems with Vantis. I think the stock dropped because many people assumed AMD was having production problems when AMD declined to give a reason. |
