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To: Paul Engel who wrote (83265)	6/11/1999 1:07:00 PM
From: Brian Malloy	Read Replies (1) \| Respond to of 186894

Maybe he knows they are about to buy Cyrix <ggg>.

To: Paul Engel who wrote (83265)	6/11/1999 10:30:00 PM
From: Ibexx	Respond to of 186894

Paul and thread, Mosesmann's report on AMD to Prudential's private clients: (Part I, Table) __________ JUNE 11, 1999 AMD: K7 DESIGN LOOKS CLEAN, NOW ITS EXECUTION TIME. REVISING NUMBERS FOR Q2. Subject: Advanced Micro Devices (AMD-$17 3/8)--NYSE SEMICO OPINION Current: HOLD Analysts: Hans C. Mosesmann (650)320-1631 Christopher Danely (650)320-1639 Risk: HIGH 12-Month Target Price: $14 Ind. Div.: - Yield: - Shares: 145.9 mil. 52-Wk.Range: 33-12 EPS FY Year P/E 1Q 2Q 3Q 4Q Actual 12/98 $ (0.69)A N/A $(0.39) $(0.45) $ 0.01 $0.15 Current 12/99 $ (1.72)E N/A $(0.81)A $ (0.67)E $(0.24) $0.0E Prior 12/99 $ (1.53)E N/A $(0.81)A $ (0.47)E $(0.24)E$0.0E Current 12/00 $ 0.45E 38.6X - (To be continued)

To: Paul Engel who wrote (83265)	6/11/1999 10:30:00 PM
From: Ibexx	Read Replies (4) \| Respond to of 186894

Moseesmann's report on AMD to Prudential private clients: (Part II) -K7 design looks good with plenty of theoretical headroom to compete with Intel at the high end of the processor market. -K7 shipments in Q2 should be in the 10Ks of units which is a fairly aggressive ramp. We remain skeptical. -We are revising downward our Q2 earnings estimate to ($0.67) from ($0.47) as a result of aggressive K7 ramp, lower K6 ASP assumptions, and K6 unit shipment limitations due to K7 capacity requirements. -We reiterate our Hold rating on AMD, and would only consider purchase of the stock as a hedge for shares of INTC in the short term. We were impressed last evening by the formal K7 technical presentation by AMD's chief processor architect at a MicroDesign Resources hosted dinner. The chip theoretically can easily outperform any of Intel's equivalent offerings by at least 7% for the next couple of quarters. Apparently any problems with the K7 going forward are likely not to be design related. Now it is a matter of manufacturing execution for AMD to ramp this processor into volume. Based on our industry research, so far in June it appears that AMD is set to ship K7s in the 10Ks of units for the quarter, perhaps a tad less than the 40K-50K units we had indicated a few weeks ago, but nonetheless a fairly aggressive ramp. We remain skeptical. Once again we reiterate our Hold rating for shares of AMD with a short term thesis that owning the stock at the early stage of a new processor volume ramp is a natural hedge for shares of INTC. Revising Our Second Quarter 1999 Estimates DownwardWe are revising downward our earnings estimates for Q2 as a result of three reasons: 1) the aggressive K7 ramp we expect will be costly; 2) K6 ASPs will likely be below the $78 posted in Q1; and 3) K6 units are likely not to exceed much more than 5.3 million units as a result of the capacity needed for the K7 ramp. Our new Q2 revenue and earnings estimates are $705 million and ($0.67) versus our old $700 million and ($0.47) respectively. K7 Relative Performance - AMD Says Better Than The Pentium III K7 benchmarks were made available for the first time yesterday, and AMD stated the K7 outperforms a Pentium III Xeon at equal clock speeds by 7% based on integer performance. Integer performance is basically a measure of how fast the processor can perform Microsoft Office tasks, such as Excel and Word. In floating point and 3D performance, the K7 far outpaces the Pentium III, with a 35-40% improvement over the Intel chip. AMD added 19 new multimedia and DSP instructions to the K7, which should also improve MP3 and ADSL performance versus previous microprocessors. The system bus, or the bridge between the main memory and the CPU, is also much improved for the K7. AMD is using a point to point bus, which provides better signal quality and thus better performance than the Pentium III bus, which is a shared bus. AMD revealed it will begin with PC-100 SDRAM for its main memory, the most common DRAM used today, and then likely switch to PC-133, or 133 MHz SDRAM sometime later this year. AMD did state they are not supporting Rambus DRAM at this time, and that they are currently leaning towards using Double Data Rate DRAM next year, or DDRDRAM, a competing architecture to Rambus. Roadmap For K7 Indicates Shipping In JuneAMD is targeting a 30% worldwide unit market share by 2001, twice their current 15% market share (units) and is implementing an aggressive plan to achieve these lofty goals. The company stated they will begin shipping K7s before the end of this month, and we believe the chip will become available to purchase in systems sometime in July, priced well above $200. The company will begin producing K7s on a 0.25 micron process, shifting to 0.18 in 4Q99. With the current die size of 184mm, approximately 50% larger than a Pentium III, the shift to 0.18 microns should lower the size of the K7 die to that of the Pentium III and allow for much higher volumes of production. _____ Ibexx