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

To: Yougang Xiao who wrote (66335)	7/21/1999 4:43:00 PM
From: Saturn V	Read Replies (1) \| Respond to of 1591208

Ref- <which company (AMD and Intel) would have the most benefits if Dresdon is sold? > I think both AMD and Intel will mutually benefit if Dresden is sold. The benefit to AMD will be immediate. An empty fab costs 400million a year. I do not think that demand for K-7 can be ramped up as quickly as Jerry is dreaming about, because of lack of K-7 infrastructure [ motherboard,chip set and cartridge constraints ], and it takes time to create demand for a premium brand [ K-6 sells mostly to penny pinching users,not premium brand users ]. Next year as soon as Dresden ships its first revenue wafers, the depreciation for the plant kicks in, raising the expenses by $100 million per quarter.The revenue is not going up significantly next year, so jettisoning Dresden will keep AMD afloat. Intel's stance towards AMD will also change if Dresden is sold. The potential capacity of Dresden is perceived by Intel as a sword dangling over its head. Intel does not want to drive AMD completely out of business [ or else it will have to cope with the US Government ], and it will be happy to see a less threatening AMD. So the brutal price war would cool down, further benefiting both sides.