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

To: Petz who wrote (109086)	5/2/2000 3:56:00 PM
From: Joe NYC	Read Replies (1) \| Respond to of 1578084

Posted 02/05/2000 1:51pm by Mike Magee DDR vs Rambus: the saga never ends A report on a Taiwanese wire that double data rate (DDR) memory will ship to the tune of seven million chipsets in the second half of this year has, once more, forced us to return to the hoary (or is it hairy) old subject of how well chipset based on this type of memory will do against Rambus memory. The report, which you can find at Ace's Hardware, is a lot of DDR memory and cannot be totally accounted for by sales of workstation and high-end servers. Intel, and a number of its main PC customers, have committed to using DDR in a wide range of up-and-coming products. Intel, meanwhile, is still promoting Rambus as the platform of choice for the high end desktop, and in particular says that it will be used with its up-and-coming Willamette processor, when that dawns. Willamette's big brother, Foster, to be used in workstations and servers, will use DDR. AMD will use DDR memory with its Athlon products. Two weeks back, Kingston, a major supplier of modules, said that the prices of mobile parts had dropped by around 35 per cent. That's most of the soap to date. Richard Gordon, senior analyst at Dataquest Europe, thinks, however, that there is little doubt that Rambus will despite all the argy-bargy, win the memory day. He told The Register today: "DDR is mainly going into the high end of the market." As far as the desktop is concerned, however, he has stronger views. "DDR in the mainstream PC market is basically a non-starter," he said. "Intel and Rambus have got it right here. Intel and Rambus have got the mainstream market sewn up." Although Gordon conceded that AMD is making strides in the desktop place, he said that, compared to Intel, it owned still quite a small piece of the PC market. Let the debate re-commence. ©

To: Petz who wrote (109086)	5/2/2000 4:15:00 PM
From: Petz	Read Replies (3) \| Respond to of 1578084

Tad vs. Ashok, from ZDNet. THIS IS ENTERTAINING: zdii.com 2HRS2GO: Analysts take opposite tacks on Intel, AMD By Sergio G. Non 22GO ZDII Can two analysts be more diametrically opposed than Ashok Kumar and Tad LaFountain? The pair are among the most-cited chip analysts on ZDII, largely because they produce very quotable reports. It also helps that they e-mail us their stuff. This week features the latest round. Needham & Co.'s LaFountain continued his renegade campaign today by reiterating an "avoid" rating on Intel (Nasdaq: INTC). U.S. Bancorp Piper Jaffray's Kumar yesterday issued his latest in a long line of skepticism on Intel's chief rival Advanced Micro Devices (NYSE: AMD); although he kept an "aggressive buy" ability to meet its market share target. LaFountain on Intel: "The emphasis on control is not only misplaced, but counter-productive..Increase in capital spending seen as too little, too late ... management claims that the planning process failed to allow sufficient leeway for the short-term capacity effects of 'equipment reuse' ... This reason sounds better than 'the dog ate my silicon' -- but just barely." Kumar on AMD: "Road To El Dorado Is Strewn With Heartaches; AMD Has Tough Road To 30 Percent Share. ... That goal seems wildly optimistic. ... fraught with difficulty ... AMD's ability to reach 30 percent or even 20 percent of the performance segment is doubtful. AMD will also be hard-pressed to hold its gains at the low end." Like I said, they're quotable. The Needham analyst's Intel frown stems from the company's recent analyst meeting in New York. Intel sees 50 percent annual gains in the communications chip business that's supposed to drive future growth. Fifty percent is much faster than Intel's traditional PC processor business, but also much slower than other network chip companies such as Broadcom (Nasdaq: BRCM) and PMC-Sierra (Nasdaq: PMCS), LaFountain points out. At the same time, revenue from Intel's core business has failed to keep pace with the uptick in demand. Intel's insistence on maintaining high margins has produced an unusual dilemma for a company with tons of money to spend. "The failure to grow fab capacity (not just equipment capacity) at a rate sufficient to support 15-20% annual revenue growth while maintaining cash balances of $10 billion on the balance sheet is likely to go down as one of the industry?s stranger blunders," LaFountain asserts. Executives from Intel point to a stronger second half. To which LaFountain says: so what? "This scenario hardly constitutes news," he writes. "Intel always has more revenue in the second half of the year. The time that the second half fails to outperform the first half likely would signal the end of Intel as a money-making investment, at least for a protracted period. ... Mismanagement and the inexorable difficulties of growing a $30 billion business are combining to generate a long-term growth rate that is likely to disappoint investors who focus on the data, not the words." He couldn't be more brutal with a baseball bat. Meanwhile, Kumar questions some common assumptions on AMD. Conventional wisdom credits the company's success with Intel's failure. Kumar lays the failure at the other end of the chip market. AMD's "biggest gains have come from the vacuum created as other low-end processor vendors left the market," Kumar believes. "Many of these customers turned to AMD, whose K6-2 is the sole Socket 7 processor remaining on the market," Kumar says. "The K6-2's speed was fine for these low-end customers. This shift has kept K6-2 shipments from dropping over the past few quarters even as that processor has run out of gas. Although AMD has seized 30 percent of the overall "value" chip business, it holds just 7 percent in the high-end segment, Kumar estimates. The new Athlon chips are powerful, but Intel's next generation Willamette chip is due for later this year; AMD's comparable product, SledgeHammer, won't reach production volumes until late next year at best, Kumar says. "Without a performance advantage, AMD's ability to reach 30 percent or even 20 percent of the performance segment is doubtful," he declares. Kumar also sees problems on the low-end, because Duron "will probably" cost more to make than Celeron, so AMD won't be able to compete on price. Intel also has an upcoming chip that combines CPU, graphics and other functions. The Piper Jaffray analyst also repeats some long-time criticisms. AMD still hasn't made any significant gains in the business market, which consumes two-thirds of all PC shipments. And the company's motherboard technology choices (Petz: THIS WAS A CHOICE made by AMD???) -- which include old Intel designs and the new, Intel-incompatible Slot A, but not compability with Intel's current line -- force OEMs into hard choices. "PC makers pondering a switch to Athlon must wonder whether to wait for AMD to settle on a single socket," Kumar says. (Petz: Yea, like Intel makes these choices for the OEM's THREE TIMES A YEAR.) And of course, the competition won't lay down. "Intel will use every trick (Petz: He admits it!) in its book to dig in its heels," Kumar writes. "We don't see AMD getting much past 20 percent market share in the next year or two." Imagine what he might have written if he didn't have an "aggressive buy" call on AMD stock. There are holes in both analysts' arguments. Kumar continues to raise some spectres AMD seems to have left behind, for the most part. The Socket/Slot issue just doesn't seem to be a big deal, judging by the use of AMD chips by IBM (NYSE: IBM), Compaq (NYSE: CPQ) and Gateway (NYSE: GTW). The business market hasn't embraced AMD, but that at least as much the fault of the aforementioned computer vendors as AMD. Regarding Willamette and the Timna all-in-one (sort of) chip as AMD threats, shouldn't we wait for Intel resolve capacity problems with its current line before we drool over something down the road? Right now -- emphasis on "now", as opposed to "forever" -- AMD seems more likely to meet its production deadlines rather than Intel. On the other hand, LaFountain gives short shrift to Intel's increasing reliance on investment gains, but what's wrong with becoming a successful investment company? As long as the strategy produces bottom line improvements -- and so far it has -- why complain? It sounds like the IBM analysts who in 1995 criticized Big Blue's move to services: "But what about hardware growth? How do they jumpstart mainframe growth?" Who cares? In the end, money is money. And let's keep things in perspective; we're talking about a single year of manufacturing problems after a decade of unparalleled success. Intel still has the resources to bounce back. There's another major problem with LaFountain's thesis, because it expects a lot from the stock market: "We understand that this viewpoint runs counter to the general perception of Intel as a core investment. But it is derived from the facts of the situation. ... Mismanagement and the inexorable difficulties of growing a $30 billion business are combining to generate a long-term growth rate that is likely to disappoint investors who focus on the data, not the words." Numbers rather than PR? Lots of luck on that one. (Petz: final comment -- numbers seem to be doing better for AMD's stock price than words are for Intel's!) Petz