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

To: kash johal who wrote (66336)	7/21/1999 3:30:00 PM
From: kapkan4u	Read Replies (3) \| Respond to of 1574005

<The Dresden guy quits and now we hear that ATiq wanted to sell off dresden.> Here is a conspiracy theory: Raza has Intel ties so he would be the perfect candidate to negotiate a piece treaty with Intel. CG and Raza held secret discussions and agreed that if AMD sells Dresden, Intel will let AMD make money. So Jerry goes to Dresden to evaluate the progress. He gets better than expected progress report and decides to gamble on the all-out war with Intel. Raza resigns. Kap.

To: kash johal who wrote (66336)	7/21/1999 3:35:00 PM
From: tejek	Read Replies (1) \| Respond to of 1574005

Kash RE: "Good call." How can you make this comment? The media and companies are reporting on a regular basis that there is a growing shortage of fab space. At the same time fab construction costs are rising to a level where it is becoming problematical for chipmakers to build. I do not know the financing costs for the Dresdan fab but with all the perks the Germans provided, I suspect it is well below cost.....and Raza wanted to sell? Raza wants to keep AMD alive even if the K7 fails. Why? Better for everyone (including the shareholders) to sell off the company. If these were truly Raza's recommendations, then he is a very small thinker in my opinion......and very pessimistic. ted

To: kash johal who wrote (66336)	7/21/1999 4:46:00 PM
From: Mani1	Read Replies (2) \| Respond to of 1574005

Kash Re <<It looks to me that even 2M Athlons at blended $250 ASP in Q2 2000 will not be enough for breakeven.>> Not true. 2 million Athlon at $250.00 ASP will generate 500 million. That is close to what the entire company did this quarter. That plus the revenues from K62 and K6 III (lets say another 150 M) plus the expected 300 million+ from flash and the rest. That is close to a Billion Dollors. 2 Million Athlons at ASP of $250 will without a doubt put AMD in black. But I think that both number (2 million & $250 ASP) are not realistic. Mani

To: kash johal who wrote (66336)	7/21/1999 5:11:00 PM
From: Saturn V	Read Replies (1) \| Respond to of 1574005

I agree with you on most of your points. The K-7 will be a tremendous technical achievement, but cannot save AMD financially, unless some painful surgery is undertaken right now. THE REVENUE WILL BE FLAT TO DECLINING: 1. Everyone seems to agree that K-6 volumes cannot go up. Given the existing pricing of Celeron and the new Intel 810 chip set, to sell at the traditional 40% below Intel will mean a price at $30. The material cost for the package alone is $20. So the K-6 front is hopeless. 2. K-7 processor has done better on the published benchmarks than expected. However you have already noted that the motherboards are not there in the volumes needed. You are going to have similar problems with cartridges and chip sets. It will also take time to establish the reputation and brand name needed to sell a high end product. It will take a year or so before K-7 will ship at a 1 million+ per quarter. THE COSTS WILL BE GOING UP: 1. As you noted the Dresden depreciation expenses have not yet begun.Most of the labor expenses may also be capitalized, and thus deferred right now. As soon as Dresden revenue begins, the free ride will end, and the expenses will increase by more than $100 million per quarter. THE AMD MICROPROCESSOR BUSINESS WILL BE BLEEDING FURTHER FOR ANOTHER YEAR. UNLESS THE FLASH AND COMMUNICATIONS COME TO THE RESCUE, AMD COULD BE FACED WITH INSOVENCY. SS AMD is chasing Moby Dick. Captain Ahab is steering SS AMD straight into the rocks, because he thinks that a shortcut must exist between the rocks, and he will thus gain on Moby Dick. The world watches the fate of SS AMD with bated breath.