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

To: Joe NYC who wrote (113502)	5/30/2000 10:43:00 PM
From: Yougang Xiao	Read Replies (2) \| Respond to of 1574270

From Albert: 03:24pm EDT 30-May-00 Salomon Smith Barney (JOSEPH 415-955-4998) AMD AMD: Outlook on Manufacturing Ramp Positive --SUMMARY:--Advanced Micro Devices Inc--Semiconductors We visited with Advanced Micro (AMD, 1S, $82-5/8) last week and came away confident in our Q2 forecast of 1.8 million Athlons and 6.4 million total processor units in the quarter. Upside would come from higher shipments of K6, and/or higher shipments of the "socketed" Athlon, which is dependent on VIA's upside in chipsets in June.The company appears very happy with output from Dresden, which is exceeding plan and generating higher yields than at the Austin fab. "Classic" Athlon wafer starts have been converted over to Duron starts, while Thunderbird is ramping at Dresden. We continue to forecast 200,000 units of "socketed" Athlons in the quarter. ------------------------------------------------- Evidently AMD has turned down a request from Dell to supply them with K6s, mostly because that line is being phased out over the next couple of quarters, to be replaced by the Duron. Dell is apparently continuing discussions on an almost daily basis regarding a potential future supply agreement. While there is no change to our current revenue and earnings estimate, we believe there is potential earnings upside to the quarter, coming from better top-line due to higher processor unit shipments and better ma nufacturing efficiencies. Conversion to new parts apparently running smoothly. From what we heard, the company's conversion from the "Classic" Athlon to the Duron (low-end) and new Athlon (Thunderbird, high-end) is going very smoothly. The risks in the shift have been substantial, including: 1) Conversion from a 0.25 micron to 0.18 micron process in Austin. 2) Ramping a new processor, the Duron, in the Austin fab in the new 0.18-micron aluminium process. 3) Ramping up the new 0.18-micron copper process in a new fab in Dresden, Germany. 4) Ramping up a new processor, the Thunderbird (which will inherit the name Athlon going forward). 5) Making sure third party chipset support was sufficient to provide the infrastructure for the processors to make their way into the market. As an example, Intel's approach is far more conservative. Intel only brings up old products on new processes, then new products on new processes, followed by new fabs on new processes. As far as we can tell, the Dresden ramp is even exceeding AMD's initial plan, and the company is confident it can ship "several hundred thousand" of the new processors this quarter. Upside to this seems possible, but will be largely dependent on how smoothly the ramp of chipsets is going for VIA. Understanding the units and prices. We are now forecasting 1.8 million unit shipments of Athlon (including the new socketed Duron and Thunderbird). It appears that manufacturing is running ahead of plan, with 10%, or so, upside at the high end of the range. As mentioned, the 200,000 units are not at risk, but upside to that number is dependent on the volumes VIA provides of its new KZ133 chipset in the month of June. The product is evidently undergoing a very steep ramp, and Q3 should see three chipset vendors on board, including SiS and Acer Labs. Initially, we are assuming greater units of Thunderbird, but over the next several quarts, Duron will be the volume running replacing the K6-2. The new socketed Athlon should ramp rapidly, challenging the highest end of the Pentium III line. Average prices for the Duron should be slightly higher than K6-2s, in the $70-80 range, but they will likely remain under $100. Prices for the new Thunderbird are expected to exceed $200, in line with current Athlon prices, which we estimated at $230 last quarter. Demand for the K6-2 remains very strong. Though AMD is winding that product down, it appears there will be some upside to our current forecast of 4.6 million units in Q2, down from 5.3 million units in Q1, mostly based on the company's ability to ship from increasingly low inventories. We had earlier anticipated average prices would be about flat at $50, but will likely fall $2-4, before flattening again in Q4. We believe this decline, driven by older contract obligations, is immaterial to earnings.

To: Joe NYC who wrote (113502)	5/30/2000 10:50:00 PM
From: steve harris	Read Replies (1) \| Respond to of 1574270

Joe, RAZA is our "friend". Add him to our list of friends. And just who is Lance Smith? Never heard of him before. steve

To: Joe NYC who wrote (113502)	5/31/2000 4:05:00 AM
From: Amy J	Read Replies (1) \| Respond to of 1574270

RE: "Raza Foundries will function as an incubator.... Assistance from the firm, however, is not cheap. On average, Raza Foundries has obtained 40 percent of the equity in start-ups" I hope this is an editorial error. If it isn't, that's sad. For entrepreneurs who don't know any better, or who don't have mentors, they may not know that no one gives away 40% of their company in the early stages. I can't think of a single example of any startup that gives away 40% at an early stage, which is many rounds/dilutions prior to an IPO. Maybe this is an editorial error? Amy J