where do you feel I am mistaken? Am I incorrect about Intel not offering as much price protection as AMD? (that's the point I was most unsure of). Where else do you think my post is incorrect?
--- O.K., let's take your assumptions one at a time...
I pretty much agree with your guess, except I think it could tank fairly hard after the analysts comment. But that's based upon my expectation for the report, compare this with what you expect:
---O.K., this is an opinion, based on your "expectation" which you are entitled to, no argument here.
I think Q4 2000 numbers will be "OK" - no happy surprise, but not terrible. I base this on reports that everything was going along fairly well until late November / early December, at which point the bottom fell out of the market. By that time, the OEMs and distributors had already stocked up, and a most of Intel's quarter was already in the bag.
---And of course, this applies equally to AMD as well as intel. Again no problem here. Just as long as it's noted that it applied to all semiconductor manufacturers, including AMD,
My understanding is that Intel doesn't provide the degree of price protection that AMD does, so once those OEMs and distributors bought from Intel, they were left holding those goods at those prices.
---Now we get to the part where you drift off again into wonderland. I don't believe there is any such thing as "Price Protection" Once a purchase order is signed for chip delivery on a specific date at a specific price, there's no "Price Protection". Unless you have some link to show that AMD offers price protection??
There were likely many fabulous deals available from Intel to OEMs and distributors by early December, but at that point nobody wanted any more stock. I'm sure Intel made some accommodations, but they still locked in a bunch of high margin sales. AMD, on the other hand, cut prices as soon as demand slowed, and rebated the difference on inventory held by distributors and OEMs
And what do you base this "AMD rebated the difference on inventory held by distributors" on? Your AMDriod wishes?
Oh wait, I see... In the next paragraph...
I think that's why you saw that sudden, huge drop in AMD prices, but much less of a change in Intel prices.
---Ahhhhh... I see, you think. No evidence or facts at all. Well, I think, there was a sudden drop in AMD prices because the AMD machines and chips weren't moving off the shelves and in a panic to get rid of the excess inventory, distributors and dealers slashed prices on the junk that wasn't moving (common business 101 practice). Of course there was no need to hold a "Fire Sale" on intel stuff... As you have pointed out.
So Intel's Q4 won't be so bad. Now the bad part, there is still a lot of high cost Intel inventory in the channel, and there will be a lot of nervousness about accepting much new stock from Intel for a while (burned fingers, and all that). So Intel sales for Q1 are going to start off very, very, slowly.
---Since it has been widely reported that Q1 computer sales are going to be slow. I think that chip sales for all companies will be slow, Unless of course you have some data that shows that distributors actually have all that "High Cost Intel Inventory" that you claim.
So Intel's number for Q4 is going to be OK, but guidance for Q1 is going to be pretty cautious. I expect an initial lift from the Q4 number, then a fall after the guidance is digested.
---Since most analyists state that Q1 computer sales will be slow, I expect the same action from AMD stock. This is a no-brainer
There will be a lot of brave and optimistic talk about up to 20 million P4 sales this year, but then the analysts will realize that that's not many for a company that expects to sell over 100 million CPUs this year.
---Looks to me that selling 20% of your sales (your figure), at the highest premiums that desktop chips can command, will be just fine thank you
Then they'll further realize that close to half that 20 million aren't expected until Q4, 2000 - and Q4 is quite a ways away right now, and sometimes things don't go as planned.
---As you said, aren't expected until Q4. But when you say that "sometimes things don't go as planned", I might also point out that in semiconductor roadmaps, things frequently happen sooner than expected.
The next 3 quarters being P3 and Celeron vs. Athlon and Duron aren't going to look so great.
---You got that right. Since AMD has almost zero presence in the laptop and server market, the 2 highest revenue/profit generators right now, I agree, things aren't going to look so great..... For AMD.
Then there will be some brave talk about 1.26GHZ .13 Tualatin P3s coming next quarter, but then some analyst will notice that AMD is already selling 1.2GHZ Athlons - and they are less than $300, quantity 1, at a store near you.
---Can't tell you how Tualatin is going, sorry.
So I think there will be a blip up, and then a slide down.
--- You could be right about the slide. I think you should sell all your AMD now before it does.
If the numbers are a lot better than consensus, and/or guidance highly upbeat, the stock shouldn't go down. If there is a major NASDAQ rally, the market updraft would take Intel along with it. But I don't expect either. And if the analysts figure it all out, and get their conclusions publicized between earnings release and the following morning's open, then there won't even be a brief blip up.
Regards, and good luck, and believe me you aren't alone,
Dan
PS - I'd also be interested in comments.
---So basically, your entire evaluation seems to based on (A) Your "assumption" that the reported Q1 Computer Sales slowdown will affect Intel but not AMD. (B) Your "assumption" that there is high cost intel inventory, but that either AMD inventory is non-existant, or "rebated" by AMD. (C) Your "assumtion" that AMD's
price cuts were due to rebates, despite the reports that AMD did not sell as many processors in Q4 as they said they would. (D)You total overlooking of the fact that Servers and Laptops are dominated by intel, and which by most reports AMD will have little presence in Q1/Q2.
Since all of your "evaluation" seems to be based on your assumptions which are clearly biased in favor AMD, and your total denial of 2 major market sectors, can you not see why people on this board are having a difficult time taking your "assumptions" seriously?
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