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

To: Scumbria who wrote (66386)	7/21/1999 7:44:00 PM
From: Joey Smith	Read Replies (1) \| Respond to of 1575421

re:Jerry will likely be an industry legend within a few months. Are you kidding? Jerry is already living in infamy. I know for fact that in academic circles, he is being used in business case studies as how NOT to run a company successfully. ;) joey

To: Scumbria who wrote (66386)	7/21/1999 7:53:00 PM
From: Elmer	Respond to of 1575421

Re: "Jerry will likely be an industry legend within a few months." Ohhh he already is! EP

To: Scumbria who wrote (66386)	7/21/1999 7:54:00 PM
From: Mani1	Read Replies (3) \| Respond to of 1575421

Scumbria Re <<Jerry will likely be an industry legend within a few months.>> Sometimes I wonder if you say such things just to get attention and responses ;-) Mani

To: Scumbria who wrote (66386)	7/21/1999 8:07:00 PM
From: Charles R	Read Replies (1) \| Respond to of 1575421

Man, I was gone for half-a-day and come back to a storm in a teacup. Here are my thoughts on the fab issue, with a disclaimer that I believe in the power of the fabless model. First about Raza: Raza is on record for a while now (well before Ashok Kumar's quote in the article that Yougang posted) that he believes in fully utilized fabs - i.e. build a fab only when the need is certain. I do not think that is a bad way to run business. At the same time this does not mean selling out Fab 30 as many others have mentioned - there are a lot of creative deals that can be done here that can tremendously shore up AMDs balance sheet. Secondly, would not having FAB 30 make sense: The answer in my view is, it depends. It depends on: a) whether AMD can get foundry partners to guarantee them capacity as they need. My guess is that this would be tough to ensure, especially if the K7 sales explode, if they do not have Fab 30 or some part of Fab 30. b) if the foundries can yield the K7s without significant speed penalty - i.e. one or, at most, two speed bins lower than what AMD can get on an internal fab tuned for the K7. Reza knows something here that we don't. AMD does not need zillions of highest speed bin K7s. There may be a good case for this one but there is not enough data to support any arguments. If anyone knows better, please feel free to post. c) general industry situation - is fab capacity at a discount or premium? We know the answer to this. This industry is currently hot and most fabs are running close to 100% capacity. Unless we get into a sharp downturn, and I am not aware of anyone forecasting such a thing in the near future, owning a fab is a good thing (assuming one can keep it well utilized) d) if AMD has enough backup options to suckup the FAB 30 capacity if it can't sell enough K7s. I think this is doable given the tightness in fab capacity. In fact, AMD may be able to get a premium because of the Cu. There is also possibility of ramping up high speed SRAMs, RF, SONET/SDH and other high speed devices. But, this takes a lot of planning and work and I do not know how well this is being done. Finally there is a strategic aspect. Intel has stumbled badly on new product execution giving a chance for AMD to increase its market share DRAMATICALLY over the next 12-18 months - AMD is unlikely to get an opportunity like the current one anytime in the near future - if ever. In summary, I think having a fab in the current environment is a REAL good deal AS LONG AS AMD plans on CONTINGENCIES in case K7 volumes do not materialize. If the marketing and sales arms of AMD do not have confidence that this opportunity can be exploited, then they should be fired and replaced with a new team and AMD management should simultaneously negotiate for some joint ownership terms on FAB 30 to limit execution risks. That is my 2 cents. Chuck