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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Charles R who wrote (4872)	8/13/2000 8:48:15 PM
From: Jim McMannis	Read Replies (2) \| Respond to of 275872

RE:"Frank makes a point about aggressive pricing affecting the stock price and Frank is on the mark. AMD will gain market share as a result of the drop and that will help AMD make up for some of the lost sales from Duron. But a lot of people may not see it that ways. It is all about perceptions in this business and some folks out there perceive the price drop as a price war that will kill AMD." Well, yes and no. Wall Streets knee-jerk reaction to price cuts initially draws scrutiny over reduced margins and profits. OTOH, seems pretty customary to drop prices in the speed chain when you introduce a new speed grade. And at time you lop one off a the lower end. If AMD is just dropping prices without a new speed grade I'd be more concerned and even then I've fully expected AMD to put the screws to Intels pricing model as soon as they started to ramp up from Dresden. After all, they have a lot more chips to sell AND they want more market share. If AMD is realistically a couple speed bins ahead of Intel then it shouldn't hurt their ASPs that much. If Intel can't keep up we will see the gulf between Athlons sweet spot and P3s sweet spot that we knew existed all along. Up 'till now there was no reason for AMD to do anything but match Intels speed and prices... Now we will see what P3 really has left in the tank. I suspect Intel had figured out what was going to happen and the P3-1133Mhz was some kind of ploy. Jim

To: Charles R who wrote (4872)	8/13/2000 10:44:32 PM
From: hmaly	Read Replies (1) \| Respond to of 275872

Chuck Re..<<<<<This analysis is quite wrong. AMD lost those sales for ever. <<<<< How do you know that. First of all, whether AMD introduced the Duron July 21 of August 21, the chipsets and motherboards weren't ready until now, so AMD COULDN'T HAVE MADE THOSE SALES EARLIER PERIOD. Maybe you can argue that AMD paper launched the Duron, just like Intel paper launched the 1 ghz. Fine, but don't tell me that AMD somehow, mystically, could have produced the chipsets and motherboards in a shorter time. Think about it. How many 1 ghz sales has Intel lost by paper launching their 1 ghz. None, because Intel didn't have them to sell. Secondly; Isn't it possible; even likely that AMD kept producing Durons and T-birds while the chipsets were in short supply and when the chipsets are available, will sell the inventory. As long as AMD has sold out all that they can produce, whether you sell them one wk. or the next will not make a difference, as you are selling everything that can be produced. If you are talking about lower prices per sale, that could be correct. With all of the rave reviews Duron has gotten, once the infrastructure is there, the sales will be there. <<<<A chipset problem free ramp would have been about 7-7.5Mu in Q2, 8-8.5Mu in Q3, 10+Mu in Q4. Instead we got 6.3Mu in Q2 and are likely to get 7Mu in Q3, 9Mu in Q4. Several hundreds of millions of dollars in lost revenues and profits which AMD will NEVER get back. This is BIG deal. <<<<< Where are you getting these figures? I have never heard any announcement that their sales would have been 7 - 7.5 mu for q2 and would have been 8-8.5 mu for q3. If AMD has sold out every athlon chip that AMD has produced, AMD's production rate is the limiting factor, not whatever figure you want to make up. As far as revenue, it is possible that the extra sales, and higher ASP's of Athlons over Durons possibly made up the difference. I don't know, but I believe you don't either. As a businessman, I do know that whether you sell a product, or put it in inventory, it counts as a asset on the bottom line. I also resent people who think they are so perfect, that if only "I" was running the company, "I" would have made sure etc. What a crock. Nobody's perfect, not even you. <<< . But a lot of people may not see it that ways. It is all about perceptions in this business and some folks out there perceive the price drop as a price war that will kill AMD. <<<<< Certainly many people on wall street will see this as a price war, just as many people last yr. saw that drop as a price war. The simple fact is that AMD had its best two quarters in history, so history tells us the last price drop on the high end was effective. Why do you believe this drop will have the opposite effect????? Apparently you are in the camp that feels that AMD should run their business to please the Ashok Kumars of the world.. I don't. AMD should run their business to maximize profits over the long haul; not try to maximize the stock price for tomorrow. If any investor wants to dump his stock because of misperceptions, that is the investors fault, not AMDs.

To: Charles R who wrote (4872)	8/13/2000 10:55:03 PM
From: Joe NYC	Read Replies (2) \| Respond to of 275872

Chuck, This analysis is quite wrong. AMD lost those sales for ever. A chipset problem free ramp would have been about 7-7.5Mu in Q2, 8-8.5Mu in Q3, 10+Mu in Q4. Instead we got 6.3Mu in Q2 and are likely to get 7Mu in Q3, 9Mu in Q4. Several hundreds of millions of dollars in lost revenues and profits which AMD will NEVER get back. This is BIG deal. I agree partially, those sales are gone forever. But the CPUs are not. If we are facing the rest of Q3 and Q4 that will both be supply limited, having those extra CPUs on-hand will be helpful. The only problem is that the chips will end up being sold for less than they could have been. The chips will still be sold profitably. Joe