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

To: Greater Fool who wrote (85793)	1/7/2000 2:22:00 PM
From: kash johal	Read Replies (2) \| Respond to of 1572713

Greater Fool, Re:"The key assumption is that CPU prices will not crash. I don't think they will crash, but keep in mind that AMD has, over the last three years and over the next one, added two roughly 5000 wafer per week fabs to the worldwide supply of microprocessors. This corresponds to anywhere from 25% to 30% increase in microprocessor capacity, and Intel is adding capacity as well. This drives microprocessors towards being commodity products, and I don't see any trends moving in the opposite direction. If you do I'm interested to hear your thoughts. Flash is another matter. The astonishing profit margins there are attracting competition; expect supply to catch up over the course of this year. So for the near term life is wonderful, but there's no good reason to think it will last forever." Re: Price crash Well there are several factors here. One is product segmentation that Intel invented as a brilliant marketing stroke. Customers at low end seem to be happy with $50-$150 CPU's in the Sub $1000 market. AMD will endeavor to follow Intel and ship approx 50% of its volume into this space. Recently SKU prices have been RISING in the sub 1K segment. All the forecasts are for robust demand in this space. In the high end AMD and Intel are keeping prices steady will cranking the MHZ. Loaded high end desktops are running $1500-2500 and they have done so for past 5-6 years - NO IMMINENT DOOM here from the market. As far as capacity is concerned. Fab 25 will be transformed into Flash over next year. And die sizes are getting larger as folks add integrated cache etc. As far as flash capacity is concerned. The market SUCKED till mid 99 and rational folks had cut back. It takes 2-3 years to arrange financing,put a new fab up, stick the equipment in and ramp up production. We are looking good for next 2 years at least. There are also technology and product barriers as well when it comes to flash. regards, Kash

To: Greater Fool who wrote (85793)	1/7/2000 2:25:00 PM
From: Mani1	Read Replies (2) \| Respond to of 1572713

Greator Fool Re <<This corresponds to anywhere from 25% to 30% increase in microprocessor capacity, and Intel is adding capacity as well. This drives microprocessors towards being commodity products>> What exactly is a "commodity product"? I bet you do not know the meaning. Also did you think that 25% increase could be less than the increase in demand? Re <<The astonishing profit margins there are attracting competition; expect supply to catch up over the course of this year.>> It is very clear that you do not know anything about Semi business and how it cycles. All the equipment makers have backlog of months! Just listen to the likes of AMAT, NVLS, KLAC, ASML, LRCX ... Do you know how long it will take to finance and build a new fab? It takes you about 8 months just to get the equipment if you ordered it now. Fab utilization is near 100% for 0.25 and 0.18. There is no indication that the fab shortage will end anytime within the next 18 months. Also AMD has long supplier contracts with a lot of cell phone makers. The prices for these contracts are independent of the spot market prices. I suggest you learn about the business. Mani