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

To: Tenchusatsu who wrote (66898)	7/29/1999 6:10:00 PM
From: Charles R	Read Replies (1) \| Respond to of 1576891

Tenchusatsu, Thanks for posting the MDR cost estimates. They seem a bit high but given that we do not really get much more accurate stuff this may be all we have to go with for our discussions. Chuck

To: Tenchusatsu who wrote (66898)	7/29/1999 6:36:00 PM
From: Charles R	Read Replies (2) \| Respond to of 1576891

Tenchusatsu, Let's revisit the debate on this thread yesterday with the numbers from MDR and see how this might effect Intel in Q4. For example, if AMD steals 1Mu PIII-600 (or whatever the highest speed grade part is at that time) sales from Intel in Q4. Assuming Intel would have sold these to OEMs at $600 (a pricing level I am sure Intel would have commanded without Athlon), Intel would lose $525M {1Mu * ($600-$75)} of profits. Now, assuming Celerons sell at an average of $100 (very generous - more likely to be sub-$70): To make up for the loss of profits Intel would have to sell an additional 11Mu of Celerons {$525M/($100-$55)} Not going to happen! So, Intel making Q4 is entirely dependent on AMD not being able to sell 1Mu of Athlons. Ain't that a pity - Intel's profits dependent on AMD not executing? And, we shall get a good idea of that in a few weeks. This is what I mean by potential valuation problems for Intel. Chuck P.S.: In reality, unless there is a serious capacity shortage or unless VIA/CYRX fall flat on their face, the ASPs are going to be close to $70 and the costs are going to be closer to $30 but that makes this scenario a little worse.