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

To: Cirruslvr who wrote (62988)	6/23/1999 6:06:00 PM
From: Elmer	Read Replies (2) \| Respond to of 1570837

Re: "Now, they have 2M processors sitting around, which we have no idea what MHz they are, losing their value daily." How many AMDolts will congratulate Paul now for calling this one weeks ago? This must be killing these guys..... I will... !!!!Great call Paul!!!! EP

To: Cirruslvr who wrote (62988)	6/23/1999 8:09:00 PM
From: Petz	Respond to of 1570837

Cirruslvr, re:<Now, they have 2M processors sitting around, which we have no idea what MHz they are, losing their value daily.> These CPU's sitting in inventory are being valued at cost (materials and labor, no depreciation) because thats the accounting standard. That is probably around $20 each. If they sell for more than that, there will be a profit from them in Q3. The statement that it was "unlikely that more than 3.7M units would sell through" indicates that at least some are in the hands of distributors, sort of on consignment. If you remember, in Q4'98, AMD was in a similar situation w.r.t. 266 and 300 MHz "AFR" parts, but in that situation they sold the parts on a non-return basis to a big overseas operation. (South American? -- anyone remember the price) AMD probably could have done the same thing this quarter, sell 2M+ CPU's to some outfit for $80M cash. ($40 each). However, with the Vantis sale they are better off taking a bigger loss now (to offset the gain) and letting them gradually sell through at the distributors. Based on the fact that less than 50% of the 6M+ CPU's produced were at 380, 366, 350, 333 or 300 MHz, I would imagine these chips are averaging 350 MHz. Petz