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

To: Paul Engel who wrote (76537)	10/22/1999 6:26:00 PM
From: Kevin K. Spurway	Read Replies (1) \| Respond to of 1573930

Re: "Remember the $600 - $800,000,000 NexGEN acquisition ?" Penang Paul, if you think that the acquisition of a sh*tbird motherboard manufacturer would cost $600-$800 million, you're dumber than I thought. Motherboard manufacturing is low margin and low tech compared to IC manufacturing. There are dozens of motherboard manufacturers out there selling products that are essentially commodities. AMD could probably pick up a decent volume mobo manufacturer for one tenth the value they realized for Vantis ($500 million). AMD can't afford a motherboard shortage, and if the shortage is a result of anticompetitive pressure from Intel, then AMD would be wise to solve the problem through an inexpensive acquisition. Your thinking is so simple and linear that you conclude that AMD can't make any acquisitions because they're already selling off divisions. You assume that AMD will lose money on every acquisition they make because they've been losing money since NexGen. You miss the point that acquiring a mobo manufacturer would be a CHEAP, strategic acquisition. AMD probably wouldn't ever make any money in motherboards, but having the capability to fulfill market demand for Athlon boards COULD help them make money in their core x86 business. Kevin