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

To: Gary Ng who wrote (95081)	2/25/2000 1:20:00 AM
From: tejek	Read Replies (1) \| Respond to of 1576633

Yes, as I said, no one wants to be completely sold out. But what I would like want to know is if that 800k figure sold was all that the market demand or the 1M( or 1.1M?) that AMD made is the max the could make so in order to make sure they had some inventory left, they some how 'refuse' to sell more ? Gary, I wasn't there when they were making the decisions; however I assume the chip business works like most businesses...your customers submit their orders for the upcoming quarter....you base your production decisions on those orders plus your estimate for what additional orders may come in unexpectantly during the quarter. I don't know what kinds of margin of error AMD or Intel employ in their calculations but neither is new to the business. What I don't know is whether 200-300 K chips in inventory is a reasonable number when you produce 1+ million during the quarter. But with AMD I am not concerned because with the Athlon their cpu business is expanding quickly. ted

To: Gary Ng who wrote (95081)	2/25/2000 7:10:00 AM
From: hmaly	Read Replies (1) \| Respond to of 1576633

Gary Re..<<<<<<Yes, as I said, no one wants to be completely sold out. But what I would like want to know is if that 800k figure sold was all that the market demand or the 1M( or 1.1M?) that AMD made is the max the could make so in order to make sure they had some inventory left, they some how 'refuse' to sell more ? Gary >>>>>>>> I believe you are concerned way too much with this inventory. You are simply letting the Intellabies spread too much fudd here and you believe them. Why? Most companies, (I know I do),figure their products as sold when the OEM'S or stores or reseller get them; as the resellers and OEMS are responsible for paying for the chips; and returns are deducted from the bill. If you account for sales as AMD does where a chip is counted as inventory until OEM or reseller or store sells them to customer, then you would normally have a much higher inventory; because you now not only have your normal inventory (warehouse, shipping to oem,manufactured in progress etc., but you are also including the OEM'S inventory as part of your inventory. In addition, being a new product,it takes awhile to build up inventory, but for q1-00 this inventory ratio number should be smaller as most of the buildup should have been done in 4q-99. So even with sales being flat q-q, AMD likely would show higher profits q`1-00 because instead of building up inventory, you are now making sales.