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

To: Scot who wrote (105441)	4/14/2000 10:07:00 AM
From: Scot	Respond to of 1573922

I also saw this article on Forbes....it's probably been posted...but what the heck: forbes.com AMD Shows It's Ready For Prime Time By David Einstein SILICON VALLEY. 5:50 PM EST-After years of playing second fiddle, Advanced Micro Devices (nyse: AMD) appears finally to be mounting a serious challenge to chip giant Intel (nasdaq: INTC). What many people already knew--that AMD's powerful Athlon chip is a match for Intel's Pentium III--became crystal clear on Wednesday, when AMD announced first-quarter results that left Wall Street gasping for breath. The Sunnyvale, Calif., company reported $1.1 billion in revenue--a whopping 73% increase over the same quarter last year--and earnings of $189.3 million ($1.15 a share), befuddling analysts who weren't expecting even half that much. The results contrasted to a loss of 88 cents per share a year ago. Shares of AMD rose from $64 to $76 after the results were released following the close of the market on Wednesday. On Thursday, the stock slipped back to $71. AMD said it sold 1.2 million Athlons in the three months ended April 2, a 50% increase over the previous quarter. Sales were fueled by the introduction of 850-, 900- and 950-megahertz versions of the chip, a pace that allowed AMD to stay slightly ahead of Intel in the speed race. Last month, AMD beat its cross-Valley rival in announcing the first chip to run at one gigahertz. AMD also proved to be surprisingly resilient at the low end of the personal computer market, where its aging K6 line of chips is going up against newer Celerons from Intel. AMD said it shipped more than 5 million K6s in the quarter. And things will only get better when the company starts shipping its new Spitfire chip for low-cost computers sometime in the next few months. The popularity of the higher-priced Athlons, which brought in more revenue than the K6s, also is having a salutary effect on AMD's gross profit margins, which grew to 45% from 40% in the fourth quarter. That?s nowhere near Intel's 60%-plus margins, but it's still pretty healthy--especially for a company that is used to being on the wrong end of price wars that knock the stuffing out of margins. Industry experts cited two factors as chief contributors to the spectacular quarter. AMD finally has its manufacturing act straightened out, enabling it to make large numbers of high-speed chips. And Intel has simply not been able to meet the demand for its chips. "AMD is doing a very good job of delivering high-clock-rate parts, and it seems like they?re a little stronger than Intel that way," says Dean McCarron, a principal in the Scottsdale, Ariz., firm Mercury Research. There, too, AMD's fortunes can only get brighter. A new chip-fabricating plan is coming online in Dresden, Germany, which will greatly increase the company's capacity by taking pressure off its main facility in Austin, Texas. The resurrection of AMD is sweet indeed for Jerry Sanders, the white-haired, twinkle-eyed chief executive who finally seems to have a chance to get out of the shadow of Intel's Andy Grove and Craig Barrett. In announcing the best quarter in AMD's history, Sanders predicted the company would sell 1.8 million Athlons in the second quarter, with overall chip shipments "modestly higher" than the first quarter's record level. Still, Sanders has gotten his hopes up in the past, only to have them dashed when Intel ramped up new chips of its own. Last week, Barrett, Intel's CEO, said the Santa Clara company has increased its capital spending budget for this year from $5 billion to $6.8 billion. That could boost Intel's capacity to ship fast new Pentium IIIs, which in turn could lead to another disappointing year for AMD.