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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: vince doran who wrote (89851)	10/11/1999 11:54:00 PM
From: Elmer	Read Replies (1) \| Respond to of 186894

Re: ". However, I think that Intel's action in changing the benchmark so that their numbers would be more impressive speaks volumes about the importance of benchmark numbers to certain segments of the market. " What are you referring to? The only "changing" that I am aware of was recently when AMD was caught cheating on a particular benchmark. EP

To: vince doran who wrote (89851)	10/12/1999 12:33:00 AM
From: Saturn V	Read Replies (3) \| Respond to of 186894

Vince- Ref < benchmark thumping by the Athlon, an edge it now seems it may be able to hold until Willamette....I think we will have seen all the trumps that Intel has to play until late next year. > I would caution against basing your investments on the above statements. Intel is playing its cards, extremely close to its chest. I wont be surprised if Intel brings out its 0.13micron process before Dresden begins yielding, or if Willamette shows up earlier than people expect it to. AMD is running dangerously close to insolvency. A slight unexpected hiccup, and it will be Chapter 11. At present the unexpected boom in Flash memory, has given it more breathing room than appeared possible three months ago.I would like to invest in AMD, but only with a new management.

To: vince doran who wrote (89851)	10/12/1999 11:45:00 AM
From: Robert Douglas	Read Replies (2) \| Respond to of 186894

Vince, AMD has a legitimate shot, albeit small, at taking a chunk of a market that yields Intel quarterly profits in the same range as AMD's entire market valuation. Why AMD will never be valued like Intel: Gross Margins: AMD will never achieve gross margins near INTC's. Some of this has to do with volume; some has to do with yields. (Last Q: AMD was 23%, INTC was 59%) Research and Development: For AMD to hope to compete, they will have to spend a much larger portion of their top line on R & D than Intel. This will severely impact AMD's net margins. (Last Q: AMD $167 million or 28% of sales; INTC $663 million or 9%) Marketing, G & A: Will always be proportionally higher for AMD negatively impacting net margins. (21% for AMD versus 12.5% for INTC) Debt: Pathetically enough, AMD has more debt ($1.5 billion and climbing) than INTC on an absolute basis. On a relative basis the comparison is daunting. Once again net margins are depressed relative to INTC's (Interest expense was 3% of sales last quarter for AMD, insignificant for INTC). Diversification: Intel has multiple PROFITABLE end-markets for their products. AMD is still searching for their first profitable market. Given the above disadvantages, it is possible that even if everything goes right for AMD, they will still have substandard net margins. And don't forget that the name of the game is profits - not benchmarks, not potential, not raves from the egghead community. Until AMD can produce profits, at an acceptable level and consistently do so, the stock market will never value the company at the level AMD shareholders are dreaming of. Comparing AMD's market cap to INTC's and saying, "if only AMD can achieve X% of this," is foolhardy. Intel's market cap has been awarded after years of mid-20's net-margins. With all of the above disadvantages, AMD can never expect to achieve the type of respect that Intel has. A realistic value, IMO, for AMD is less than one times sales - about where it's trading. Sorry, that's my view on the situation. One more thing, I never felt that it was AMD's goal to reach mid-20's profitability. I always thought their raison d'ˆtre was to stop INTC from having these margins. This is a crusade not an investment. -Robert

To: vince doran who wrote (89851)	10/15/1999 1:21:00 AM
From: Saturn V	Respond to of 186894

Vince Ref < ..point I think we will have seen all the trump that Intel has to play until late next year. .. > and AMD as an investment. If you base your Intel-AMD decisions based upon the trumps or cards you can see, you will be in for extreme disappointments. The two companies have diametrically opposing styles when it comes to showing their cards. AMD is forced to show its trumps early, particularly for the K-7. It needed to have third parties develop, and manufacture mother boards and chipsets, BIOS etc. The only way you will get their attention is to loudly blow your horn, and hype your product. And the AMD management is outstanding at over hyping. Worse AMD misses its public commitments, because it is under resourced and,and has poor implementation strategies. Intel is not in the same position and prefers to play its cards very close to its chest.It is forced to show its cards to get third party software support, as needed for MMX or Katmai SSE software.Again Merced has been hyped to get other vendors to write Operating system and applications software.Otherwise Intel will stay mum, except to publish a roadmap for PR reasons, and to keep its customers comfortable. Andy Grove of Intel is known for his paronia, and galvanized Intel into a frenzy to protect the low end, because he is afraid of a day when the low end becomes "good enough for everyone", and wipes out the high end.[Historically Intel ignored the low end, because of the slim margins. ] So Intel's Celeron counter attack has decimated the low end competitors. The K-7 targets Intel's Fort Knox, the bulk of its profits. Andy Grove has had plenty of warning to be ready for the K-7. Knowing what is at stake, he will surely have several defenses in depth. I can only speculate to what the defenses might be: A. Pulling in Willamete. B. Having a 0.13micron Coppermine. The 0.13 micron may not be that far away for Intel. C. A hybrid 0.13/0.18 micron process. A 0.13 micron stepper can be used for the poly layer, and the other layers can still be 0.18. A 0.13 micron poly with thinner gates and new implants will definitely take Coppermine well past a GHz. The 0.13 micron poly can also be achieved with 0.18 lithography. Simple tricks with the photoresist exposure and developer, or poly etching can also pattern 0.13 poly. Andy will definitely do whatever it takes to protect his Fort Knox. The deck is stacked against AMD with very high risk issues: A. The 0.25 micron is being ramped down while 0.18micron is ramped up. This is a very high risk. New processes typically have hiccups. A hicuup on 0,18, and AMD loses all revenue.[ Intel ramps up a new process in a new fab, while the old process still continues to run. So a possible hiccup on the new process is not catastrophic.] B. Dresden starts on a new Copper process developed by Motorola. The Copper technology is very immature.[Historically Copper has been the enemy of silicon processing.] Motorola is having enormous trouble shipping Apple processors made on the Copper process. It is not clear what the problem is, but this is a definite red flag. AMD cannot afford a hiccup in either Fab 25 or Dresden. Its financial situation is so precarious, that one misstep might cause insolvency. The only bright star is Flash,which will have to be sold if the current cash drain continues. So an AMD investment is very risky today.