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To: Gary Kao who wrote (85770)	7/15/1999 11:51:00 AM
From: Barry Grossman	Respond to of 186894

Gary, I'm not an accountant and don't know if there is a time limit to take a write off but inventory gets taken quarterly and is probably valued at lower of cost or market so as the market value shrinks that lowers inventory value. The effect will show up quarterly in their financial statements. As far as their cash position and burn rate, I'm sure they still have credit lines they can still draw down and there are still suckers out there willing to take a high interest rate from them to accept the risk of default so they're not finished yet. But an endless stream of losses will make it a certain finish. Hope this helps a little. Barry

To: Gary Kao who wrote (85770)	7/15/1999 11:52:00 AM
From: Tony Viola	Respond to of 186894

Gary, Looking more closely at AMD's numbers, they report $600 or so million in cash, which at a burn rate of -200 million/ quarter could place them in jeopardy by the end of the year. However, they have stated that they have 1-2 million K6 chips unsold and sitting in a warehouse, presumably virtually worthless. I do not see this liability anywhere in the AMD statements. At what point would AMD have to declare this writeoff? I would think it would be substantial, $50 million or so at current ASPs. Thanks for any insight you can provide, I defer your question to the business folks. Tony