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

To: Charles R who wrote (43535)	6/9/2001 9:34:55 AM
From: combjelly	Read Replies (4) \| Respond to of 275872

"There is no shortage of capacity at AMD right now. " Are you sure of this? I'll grant you the possibility that AMD might be able to push some more processors out of Fab25, although I have reasons to beleive that isn't true, but what information do you have that Fab30 has spare capacity? The Colonel has claimed that AMD has sold out of Athlons for the past few quarters. Last quarter he mentioned that they were making Athlons at Fab25 again, not a likely course of action if Fab30 had idle capacity. If you have examined their quarterlies, you will see that inventory has not increased much, although admittedly you could likely hold a lot of unpackaged die as work in progress and not show much of a bump in inventory value. Now I guess you could argue that they are running Fab30 on a reduced schedule to keep from building inventory, but you would have to explain why they would want that. You could claim that prices have eroded too fast for AMD to be capacity constrained, but that could be explained by possible promises made to OEMs that prices on a given processor and speed grade would decline by a certain percentage periodically and AMD is cutting those prices to be a more reliable partner. There is other evidence that AMD is trying really hard to be a reliable partner, if only VIA would do the same... So what evidence do you have that there is no capacity shortage? You have(or someone else has) been making this claim for several quarters, and every quarter AMD has announced that they have sold out of Athlons and in Q1 they even announced that they have sold out of Durons. Since there were only minimal increases in inventory during those quarters, I am inclined to believe them. So either they are keeping idle capacity or they are eating the chips.

To: Charles R who wrote (43535)	6/9/2001 12:29:25 PM
From: Dan3	Respond to of 275872

Re: There is no shortage of capacity at AMD right now. What I know is that my VAR sat on all the other parts for our most recent PCs for 2 weeks waiting for 1.3GHZ Tbirds to be back in stock at any of his distributors - and at the same time, we aren't seeing shortage pricing or a slowing of price cuts which (I think) indicates that yields are OK. Product is flowing into distribution, but it's getting snapped up just a little faster than AMD can pump it out. My take is that there simply aren't enough parts for more SKUs right now. But Dresden will continue to ramp to the end of the year, so volume should keep increasing through the first quarter of 2002. If the overall computer and semi markets were even mediocre, I'd be as enthused as Niceguy767 - but since the markets to which AMD sells are all in horrible straits and look to be staying that way for a couple of years, I am not. Dan