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

To: Petz who wrote (82295)	12/8/1999 12:48:00 AM
From: Charles R	Respond to of 1574096

<flash prices on the spot market DROPPED by 20 to 40 percent because of a large new supply from AMD and Nokia trimming inventory before the end of the year.> Semiconductor industry defines the boom/bust cycle. I have rarely seen an industry that is this poorly forecasted. Industry folks rarely have an idea when the boom begins until the boom sets in and are equally bad in telling ehen the boom ends. Think of this cycle. Companies started figuring out things were good only 6 months back that too when it became obvious that lead times were streching accors the industry and no one had excess capacity. Now everyone and his brother is adding capacity and going to 0.18. Unless the demand is just about right, the story will get worse. Just about the only theme one would see looking back at the last 10-15 years is that the boom ends a lot sooner than the industry predictions during the boom time. I have a decent semi position and keep my trigger finger ready. Right now I can see couple of good quarters for flash then I see a lot of capacity coming in...

To: Petz who wrote (82295)	12/8/1999 8:00:00 AM
From: niceguy767	Read Replies (1) \| Respond to of 1574096

Hi John: Thank you for sharing this additional information. Looks like flash memory pricing could be a major wildcard as both you and Bill point out. My $2 billion prediction is very rough, I'll be the first to admit, but it seems to me that production capacity at Austin alone could treble with the shift of the MPU division to Dresden. Not wanting to beat a dead horse, but if a trebling in production capacity is at all reasonable, (and I don't know it to be so, but Niles 70% qtr to qtr production growth comment would support this notion), then a doubling in production revenues does not, to me, seem an absurd possible outcome, if prices remain, on average, stable. I'm not stuck on the $2 billion. It's just the number I'm using until a rationale that I can understand for using some other number (higher or lower)is presented. What I am stuck on is my perception of the enormous present value of the potential future income stream deriving from the Athlon! If that 1.2 million number stands up, there is little doubt that 99Q4 revenues will exceed $900 million and if ASP for those 1.2 million Athlon is $300, there is more than an outside chance that AMD will break the $1 billion barrier in 99Q4. (i.e incremental revenues in 99Q4 from Athlons alone would be $300 million which when added to $672 99Q3 earnings gets us to $972 million. Net incremental revenues from non-Athlon processors and flash memory might just get AMD there). At the very least, a nice thought if you are bullish on AMD!