Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Charles R who wrote (7157)	8/31/2000 7:45:41 PM
From: Maverick	Respond to of 275872

MSDW:AMD executed well so far in ramping Athlon shipments By Edelstone/Cross/Gerhardy (San Francisco) – Aug. 23, 2000 Excerpts follow: AMD executed well so far in ramping Athlon shipments Key Investment Positives · Athlon should help Advanced Micro’s average selling prices (ASPs). We believe the Athlon MPU has helped AMD to increase blended MPU ASPs and to increase its addressable market. The Athlon has proven to be a high-performance, highly scalable processor that should be able to compete effectively against the high end of Intel’s processor line. AMD initially supports Athlon MPUs with its own chipset, and several Taiwanese companies provide additional chipset support. · Demand for flash memory remains strong. AMD believes flash bit demand will continue to grow 100% for the next three to five years and the company is adding capacity to support that level of bit growth. We believe AMD is benefiting from strong demand in the flash market driven by cellular phones and telecommunication applications. AMD has signed long-term supply agreements with Samsung, Alcatel and Cisco for flash memory, and the company is negotiating more long-term contracts with other companies. · Potential for higher margins. Due to the high fixed-cost nature of AMD’s business, incremental revenues should enjoy high incremental margins. We believe the key to realizing this potential is solid manufacturing and marketing execution. Thus far, AMD’s Athlon execution has been excellent, in our view. Key Investment Risk · We think that expanding the Athlon family and managing product transitions is a key issue. The transition to Athlon and Duron — AMD’s MPUs for the performance and the value segments, respectively, which utilize Athlon’s core architecture — is a key factor for AMD’s continuing revenue growth and margin performance, in our view. · Cyclicality of semiconductor industry. While the semiconductor industry has enjoyed a historical compound annual growth rate of 17%, year-over-year growth rates have varied greatly. After declining 9% in 1998, semiconductor revenues grew 18.9% in 1999. We expect capital spending to increase as a percentage of semiconductor revenues in the next two to three years. This trend can eventually be expected to cause the industry to reach a cyclical peak by 2002. · Inventory accumulation. While investors appear to be uniformly concerned about inventory levels and the potential that capacity constraints have led to double ordering, we do not believe that the industry currently faces a material level of risk.