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

To: Petz who wrote (38862)	5/10/2001 12:35:35 PM
From: Harvey Allen	Read Replies (2) \| Respond to of 275872

But for Intel to put up a fabrication plant would cost them $2 billion. Not too many companies have that kind of money, including AMD (AMD:NYSE - news). I've seen estimates that in 10 years, putting up a semiconductor fabrication plant will cost $50 billion. That's more than building a nuclear power plant. No company is going to have this kind of cash to compete with Intel. thestreet.com

To: Petz who wrote (38862)	5/10/2001 1:13:05 PM
From: dale_laroy	Respond to of 275872

>AMD/UMC deal or non-deal -- is it for co-investment OR for farming out production?< A joint venture between AMD and UMC for Fab35 would be too little too late. Not to say that this is not what the talks are all about. A better deal would be for AMD to buy into Fab12. I read somewhere that Fab12 is supposed to begin production Q4 of this year, but almost every other source claims early 2003. Fab25 should be fine, even at 0.18-micron design rules, up until the point where Intel starts shipping a value segment P4. Even the 0.18-micron Morgan should be able to keep up with Tualatin both in speed grade and performance. AMD's problems start with the introduction of a value segment P4 processor. Morgan, and even Appaloosa, would not be able to remain viable with the introduction of the value segment P4. Duron will be about as competitive as MII was in H1 1998 in such a market. AMD might be able to extend processor production at Fab25 by going to 130nm design rules and low-k dielectrics for value segment Hammer production, but this would be a high risk strategy. A better strategy would be to plan on shifting production at Fab25 to flash sometime between the mid-2002 and mid-2003, with Fab25's processor production capacity being shifted elsewhere. This is where UMC's Fab12 could come into play. AMD could either farm production out to Fab12, or buy into Fab12, or perhaps just lease part of the capacity of Fab12 until production at Fab35 ramps.