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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Marco Polo who wrote (61143)	6/9/1999 4:56:00 PM
From: Tenchusatsu	Read Replies (1) \| Respond to of 1573811

<It does actually make economic sense to overproduce K6's in anticipation of devoting as much fab space as possible to the K7, assuming that the profit difference between the original date K6 and the later date K6 is less than the profit difference between the original date K6 and the later date K7.> First of all, AMD doesn't "overproduce." They make as many as they can. Second, a huge inventory of K6-x processors is a very bad thing, considering that prices drop very quickly. It's better for AMD to sell everything they have now, even if it means slightly lower ASP, than to sell off their inventory two or three months later when the ASP on those same parts are much lower thanks to depreciation. And third, it makes no sense to ramp down K6-x production as quickly as you are suggesting, because the K7 is initially going to be extremely low yield. K6-x production right now is pretty mature (i.e. no more problems). To move aggressively from a mature product line (K6-x) to an immature one (K7) would be asking for trouble, especially if the the immature product line runs into the same kind of manufacturing problems that we've all seen before. Tenchusatsu

To: Marco Polo who wrote (61143)	6/9/1999 6:44:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 1573811

Benjie Polio - Re: "It does actually make economic sense to overproduce K6's in anticipation of devoting as much fab space as possible to the K7, assuming that the profit difference between the original date K6 and the later date K6 is less than the profit difference between the original date K6 and the later date K7" So you had to assure us that you too are an economic lamo! Get with it - AMD's sales are in severe trouble ! Their customer base is shrinking. You can sprinkle fairy dust all over this unsold inventory situation, but the reality is YOU DON'T BUILD PARTS IN ADVANCE THAT ARE DEPRECIATING DAILY IN VALUE ! The interesting thing is that the DUMB AMD managers are no smarter than the AMDROID INVESTORS such as yourself and all-meat Kal Kan ! Paul