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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (9292)	1/18/2001 2:08:40 AM
From: Charles R	Respond to of 10921

<Where do they get the money? > AMD's net income was close to $1B for 2000 and this is expected to go up in 2001 (unlike Intel, I might add). <They do not generate 32% margins. > GM for 2000 is ~ 46% See amd.com <If sales increase, they'll need more working capital to support those increases, they generate about $600 MM a year in amortization, and their profits are not going to reach the $700 MM mark, so, they'll need to borrow some $200 MM, unless they want to deplete cash. It is feasible, but quite risky. On the other hand, Sanders has that burning fire in him to beat INTC, and that might be a sufficient drive.> A lot of people are grossly misinformed when it comes to what is happening in the microprocessor industry. AMD is no longer the weakling it used to be and Intel is nowhere near as strong as it used to be. Some people who thought that Intel will kill AMD in case there is excess capacity are waking up and noticing that AMD picked up market share yet again this quarter (only a tiny amount this time though but it adds up quite nicely over time) Intel needs to spend a lot on capex since AMD is killing Intel on P3 and Intel has to move to P4 to retain or regain market share. Fortunately for the semi equipment guys, P4 die is more than two times larger than P3 and Intel needs ton of new 0.13 capacity to ramp P4. Almost all of these are all new fabs because of Intel's move to Cu at 0.13 On the otherhand, AMD needs to spend a ton on Capex to move to 0.13 to make sure that Athlon remains performance competitive with P4. Flash soaks up the rest of the dollars. Most of this is expected to be equipment upgrades - just one new fab (that too a Flash JV). And the race goes on....

To: Zeev Hed who wrote (9292)	1/18/2001 8:42:17 AM
From: Sam	Respond to of 10921

RE: AMD's outlook From a theStreet.com article on AMD's earnings: <<Looking ahead, AMD said that first-quarter revenue would be flat from the fourth quarter's $1.18 billion. That's a little better than at Intel (INTC:Nasdaq - news), which expects revenue to decline by about 15% in the first quarter from the fourth quarter -- far below analysts' expectations. AMD also expects that unit shipments will decline to 6 million to 6.5 million from 7 million in the fourth quarter. That's above Merrill Lynch analyst Joe Osha's estimates for 5.5 million unit shipments. (Merrill hasn't done underwriting for AMD.) For the year, AMD said its revenue growth would be at the high end of analysts' expectations for 7% to 15% growth. Based on 15% growth, AMD said net income would come in around $2 a share. The consensus estimate is for earnings per share of $2.02. During a conference call, AMD CEO Jerry Sanders reiterated that based on his experience, he doesn't foresee as weak a first quarter as the larger Intel does. "They're either serving different markets, or they loaded customers up last quarter and are paying this quarter," Sanders said. And the company intends to continue spending on equipment and infrastructure in 2001, raising its estimate for capital expenditures by 24% to $1 billion, he said. Intel on Tuesday said its spending would rise 12%.>>