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

To: steve harris who wrote (78845)	11/6/1999 12:54:00 PM
From: Charles R	Read Replies (1) \| Respond to of 1573983

Steve & Thread, <iNTEL is also suing VIA/FIC over the SD11.> <I think it is a great time to take a short position in AMD.> I spent a little time trying to understand what the lawsuit is about and how it may affect Athlon sales. There are still quite a few detail missing at this point in time but here is what I think of it as of this AM. - This is bullying tactic from Intel aimed at motherboard vendors and second/third tier OEMs. Though this appears to be a move to stall Athlon progress and reduce VIA momentum, there is also a chance that Intel has something more complex in its plans that we have no visibility into. One possibility is that a complex deal with VIA/FIC may be in the works. - The patent claim itself seems pretty shaky but should definitely bring some FUD factor in the industry that depends Intel to support 80%+ of the processors. - The patent does not seem to have any impact on Top-tier OEMs. Probably because the OEMs have system level cross-licenses with Intel or Intel does not want to piss off major OEMs by causing unnecessary legal troubles (Motheboard vendors on the other hand are disposable) - Athlon sales at the top-tier OEM's probably will not take a hit. - Athlon sales in second or third tier OEMs and retail mom&pop shops may take a hit. If this unit volume is significant then I am pretty sure Jerry will go and collapse the OEM pricing to dispose off those parts taking Intel's ASPs also down in the process. - The more interesting impact will be on the chipset angle. Other chipset vendors with plans for Athlon chipsets have to account for potential legal hassles from Intel in their business decisions. Based on the above here is my take on what it could mean to AMD. Upside: Assuming a small dose of commonsense AMD management should have figured out Intel's potential bullying tactics in taking chipset issues. Also, people understand that companies resorting to lawsuits are typically the companies that are losing in the market place. People understand Intel is on the losing side of technology race right now. No one likes to be sued and that gotto help AMD in the long run. Downside: AMD has screwed up before. Prognosis: Mild negative for AMD to the extent it hurts the second/third tier business or future chipsets. Summary: Intel is using legal FUD to stall Athlon. AMD management should work more diligently to take more ownership of the infrastructure issues. For all we know this may be a negotiating tactic Intel is using in a chess game with VIA/FIC. Whatever it is, there is small chance that these tactics will backfire against Intel but in this apparent supply constricted environment, they clearly felt the risk was worth taking. Gone for the weekend... Chuck