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

To: A. A. LaFountain III who wrote (107003)	4/20/2000 2:25:00 PM
From: Mani1	Respond to of 1573827

Tad, thank for the explanation. Nice to have you here again, even if it is for just one post. It would have been even better if you had not downgraded AMD :) Mani

To: A. A. LaFountain III who wrote (107003)	4/20/2000 2:29:00 PM
From: Joe NYC	Respond to of 1573827

Tad, Are the inventories priced at cost? If they are, multiplying by (1 - gross margin) = 532 * ( 1 - .63) = 1,437 which is slightly higher, but assuming no breakdown in supply, I guess it could be sufficient. But your point of Intel saving pennies to bring the margins up is interesting. I wonder what the dollar amount of the lost earnings is, compared to the amount saved by under-investing in Intel's core business. Joe

To: A. A. LaFountain III who wrote (107003)	4/20/2000 2:41:00 PM
From: Tenchusatsu	Read Replies (2) \| Respond to of 1573827

Tad, just one question. Why the INTC price target of 60? Seems like you're almost predicting that Intel will drop off the face of this earth. Tenchusatsu

To: A. A. LaFountain III who wrote (107003)	4/20/2000 3:59:00 PM
From: pgerassi	Respond to of 1573827

Dear A. A. LaFountain III: Hear Hear!!!! Pete

To: A. A. LaFountain III who wrote (107003)	4/20/2000 5:13:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1573827

Tad, You are right on. Also none of the analysts seem to be question the problem of managing a technology transition when you have huge capacity tied up. The forthcoming move to 0.13 and cu will pose execution problems for Intel that FAR outway anything we have seen so far. ALL AMD has to do is to order equipement into Dresden as required. The execution risks favor AMD by a wide margin. PS. Good to see you post. We still love you for being one of the few Analysts to bang the AMD drum when the stock was sub $20. We also hate you for the recent downgrade. (Can't please 'em all I guess!!) regards, Kash

To: A. A. LaFountain III who wrote (107003)	4/20/2000 9:13:00 PM
From: Daniel Schuh	Respond to of 1573827

Hi Tad, I just had to drop another little message, thanking you for dropping by. I loved that "avoid" rating. I don't like to badmouth Intel too much, they used to have pretty good engineering and everything, but it seems that too many off their engineers spend more time FUDding around here than, er, engineering. Cheers, Dan.

To: A. A. LaFountain III who wrote (107003)	4/20/2000 9:46:00 PM
From: DRBES	Respond to of 1573827

The stage do appear to be getting set for the AMD share price to cross the intC share price. Also...my 3 to 5 year GUB scope (now 2-4 years...some time has gone by) of $500 to $1000/share do seem to be less unlikely. Do please communicate to me, by private message, your fax number. I have a research report that I authored in 1981 that you will probably find very entertaining. It was both correct and prophetic...even to this date. It, the report, however committed the two unforgivable sins of being too early; and, even worse, it went against the herd. Regards and continued good luck, DARBES

To: A. A. LaFountain III who wrote (107003)	4/21/2000 5:32:00 AM
From: Amy J	Read Replies (4) \| Respond to of 1573827

Tad, RE: "Raw" As processes improve, less raw material is used. How much did the processes improve? RE: "a little crazy to run with only " Sounds like you're not big on JIT manufacturing? RE: "If you're effectively the only game in town" I don't think you meant to imply AMD is not a feasible alternative? RE: "you're" now means "you were" instead of "you are")" Intel's not going out of business. RE: "Given that the management had been talking about a strong second half for all of last year, why were operations so stessed" How long does it take to get a fab out? How many fabs does Intel have now? Hasn't Intel's spending on fabs essentially doubled in two years? RE: "to meet a typical ramp in demand?" Who said it is a typical ramp up in demand? In the CC, they implied their demand was high, so please prove your point, which contradicts what they said in the CC. RE: "4Q99 was up only 8% Y/Y" YOY on what? Content not clear. RE: "multiple in excess of 40x" I remember back when INTC wouldn't budge above a PE of 20-22 and MSFT would hover around 25 to 35. Value investing hasn't been in favor over the last 5 years, which isn't necessarily a good thing. RE: "either execution at Intel will improve" Most likely. RE: "price correction" Not an issue for a LT RE: "why did a company with $20B+ of cash and securities" You know as well as anyone, that securities are not cash. Generally speaking about startups, pre-IPOs have FRORs, post-IPOs have lock-downs. Not exactly immediately liquid. Also, securities can be an investment in the future. RE: "fail to invest in property, plant and equipment in 1998-99" I'm sure you remember the semiconductor recession. It was amazing how the Internet was booming, meanwhile Intel was in the middle of a semiconductor recession. So, are you suggesting they should have been investing in capacity like mad back then? IMHO that risk would have been significantly greater. There's a difference between taking a risk (Intel) and gambling (AMD). RE: "How did the planning process go so astray?" If Intel had announced plans to build up capacity like mad during the semiconductor recession, I wonder what you would have said back then? RE: "I'd love to know what went on." How come you didn't ask this at the CC? RE: "And the investment stuff is all about the momentum" ST, not LT. Your ratings (I seem to recall) are only 1 year out (based upon 5-year projections). One-year is a bit on the ST side. Regards, Amy J

To: A. A. LaFountain III who wrote (107003)	4/21/2000 9:56:00 AM
From: Elmer	Read Replies (5) \| Respond to of 1573827

Tad - "Qtr Raw WIP Finished Total 3Q99 204 840 582 1,626 4Q99 183 755 540 1,478 1Q00 228 802 532 1,562 " Without column headers it's not clear what these numbers mean. How about telling us what the columns mean? Re: "Given that the management had been talking about a strong second half for all of last year, why were operations so stessed to meet a typical ramp in demand?" Tad you know it takes 1-2 years to build and bring online a modern fab, unless you're AMD and then it takes 3-4 years. Just what do you think could have been done in 6 months time to increase capacity? You're good at criticizing but short on workable solutions. Re: "why did a company with $20B+ of cash and securities that has been talking for quite some time about a market that it expected to grow to 100MM servers connected to 1B PCs fail to invest in property, plant and equipment in 1998-99" I think you answered your own question already before you even asked it. As you stated above, Intel didn't forecast the jump in demand until 1999 so you are criticizing them for not starting capacity expansion in 1998? I don't think your argument is well thought out. You miss the obvious and overlook the significance of your own statements. You have yet to show where Intel could have improved their capacity planning short of a better crystal ball. Unlike you they didn't have the benefit of hindsight. EP

To: A. A. LaFountain III who wrote (107003)	4/22/2000 3:36:00 AM
From: Petz	Read Replies (1) \| Respond to of 1573827

Tad, welcome back, but I differ with the reason for the "Intel CPU shortage." IMO, its not lack of investment but poor implementation -- 1. Intel has gone from 0% 0.18u, 100% 0.25u to 50/50 in the last 6 months of wafer completions. That should have been enough for CPU output to grow at least 25% even allowing for some equipment downtime without adding any new capacity. The fact that output did not grow that much is strong evidence of yield and/or binsplit problems, although a significant amount of this may be at the packaging level. 2. Microsoft has recently complained about poor business PC demand, yet Intel continues to claim that demand is extremely robust. They keep saying "demand is higher than forecast" but where's the proof? Even AMD just met sales projections for the high-end Athlon PC's and did not exceed them. 3. Intel's forecast that supplies will not ease until the THIRD quarter also implies that the continued migration to the 0.18u process will not result in any additional CPU output in Q2. Clearly something is wrong with Intel's 0.18 production. Maybe the equipment Intel is using for 0.18 is simply not good enough, or not good enough to do the "notched gate" feature which is the primary method of extending the MHz limit of the P6 architecture. Petz

To: A. A. LaFountain III who wrote (107003)	4/23/2000 11:01:00 AM
From: Amy J	Respond to of 1573827

Tad, Elmer, and Thread, RE: "typical ramp in demand?" Happy Easter to those who celebrate Easter. RE: typical demand It's not typical demand. In fact, after analyzing MS's CC reports, it's pretty clear that: a) chip demand is very strong and b) MS's OEM growth is being limited by available chips (ouch) This is obvious because: a) Retail MS-W2K sales are strong per MS (And this is coming from a company that doesn't exaggerate, so demand must be quite good). As you probably know, MS RETAIL OS sales can be a very strong leading indicator for OEM sales, since strong retail OS sales means customers really, really want the product. And, as you know, OEM sales are a direct indicator of chip demand. But can they buy the product which they want? b) MS OEM Sales are weak Why are MS OEM sales weak while demand for the product is solid? Can't buy, what you can't build. When buyers strongly want a product (read: strong OS retail demand), yet, have weak OEM sales (5%), this implies there's a chip shortage. You can't have strong OEM sales when "business PCs" can't be built to meet demand. It also means MS's growth is now limited by Intel & AMD's ability to produce chips, which is really unfair because I own a lot of MSFT that is now being limited by Intel & AMD's capacity to produce chips. Not sure about this, but I seem to recall this happening during one of the earlier OS releases in either 1990 or 1991 W31, or 1995 W95? They said Win2000 has strong demand in the retail (i.e. customers want this product), and while this bodes well for the industry in the LT, short-term I'm not happy that Intel & AMD are holding hostage MS's OEM growth. OTOH, once there are more available chips, I think MS, Intel, and AMD could have a blow out year. If the ASPs hold, then maybe their stocks will enjoy some of this too provided Nasdaq (Greenspan) doesn't decide to act up and ruin what could be a good year. One additional thought: OEM can be weak when Retail is strong, only in the scenarios of: a) chip shortags or b) customers wanting the software but not wanting to buy the hardware (so maybe some Y2K effect too) Regards, Amy J