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

To: jcholewa who wrote (34640)	4/3/2001 10:05:59 AM
From: dale_laroy	Respond to of 275872

> "- overall demand collapses like it did in Q4" > Not a significant danger, even if it occurs. "I think it's more of a danger than you'd think. If it happens, that is. Luckily, it's just possible that AMD might have underestimated their shipment numbers for Q1, and they might be smart enough to do the same for Q2, so that particular danger may be averted." AMD is in the position that they can take sufficient market share away from Intel to make up for a collapse like Q4, although a much more severe collapse could be a major problem. > "- flash may be extremely week and will offset any > potential gains in the CPU market" > Possible. Contract sales can be cancelled. "I think you may overestimate the possibilities here. First off, AMD gets a breach penalty payment if this happens. Secondly, I suspect that cancellations would be managed ahead of time by a number of weeks (eg, the customer couldn't suddenly say "Hey, remember those six million ICs you just shipped out to us? Well, we've changed our minds, so we'll reroute it all back to you, free of charge"). Hmmm, now that I think about it, isn't AMD required to announce news that would materially affect the company and stock? Wouldn't a contract cancellation fall under this category?" A last minute cancellation could cause a major revenue shortfall in Q2. Sure there would be penalties, but the revenue from these penalties would probably contribute to a later quarter. > "- notebook entry arrives too late to make any difference" > Very likely, but this probably would not be enough to cause a weak quarter. "If AMD is smart, then they'll give their financial estimates with the assumption of no new mobile products." I think that AMD is not factoring notebooks into any revenue projections until Q3.