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

To: Dan3 who wrote (87329)	1/14/2000 11:13:00 PM
From: greg nus	Read Replies (1) \| Respond to of 1573242

Dan first Com goes. AMd has already strategicaly stripped out what ever important patents needed form coms assest, plus a reversal at this time would blur focus. Take note how AMd is execuiting better with fewer distractions on it's plate is makig it easier to eat some of Intels lunch. Second flash will not take over fab 25. my guess is only a portion of Fab 25 will get utilized for flash. last time i looked Amd was only getting about $30.00 a chip for flash. Flash will get it's own a production capacity boost as the joint venture shifts production from.25u process to .18u as is happening now with CPU's. Lastly I think AMd has a ramp plan to get over all production up to 40 million annual run rate for chips out of Fabs 25 and 30. Currently they are at 20million annual and i would expect 25% qtr over qtr. production increases now that .18 is in place not to be out of line. If you look at last qtr. it takes about 4.5 million cpu to break AMd even. Going forward with over headcovered one might expect marginal production over 5 million Cpu per quarter, AMD's margins should start to look like Intels as marginal wafer cost and margial labor cost about a 30 to 40% of marginal revenue droping right to the bottom line at 60 to 70%, stress again however that this happens only on production over 5million chip per based on a b.e. of about 800 million a qtr. If i'm not mistaken AMd said b.e. peaks this qtr just under 850million due to some unidentified special circumstances and is projected to go down during 2000. My guess is that those lower conditions have something to do with the dresden statrup or jockeying of some of the R&D which gets shifted to work in process as athlon .18 gets launched and .18 cpooer is launched in dresden.