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

To: tejek who wrote (48614)	7/22/2001 3:18:06 PM
From: bacchus_ii	Read Replies (3) \| Respond to of 275872

RE:"I don't care how very fixed cost/labor intensive an industry is, when you get into a mess like the one AMD is in the best approach is to shut down the bleeding as quickly as possible. You want to minimize losses and keep your cash intact for the time when the turnaround does come so you can once again pursue market share. Unfortunately, this is not Sanders style and he will push for option 2. That's why the market is selling off the shares. They expect a return to AMD's bleeding days." If AMD maintain 30% market share target, WS may accept we are in different situation this time. AMD have no choice to maintain 30% target. Even at lost. If the bleeding is to long for AMD ... it will be too long for Intel also. As I have written in Message 16038695 "it's a lot easier to maintain profitability at 30% market share than at 50% or 75%. " As soon as 30% is reached then you only work to climb at top of ASP, not at bigger market share. They can achieve that with no new FAB, juste upgrade and maybe outsource a little at IBM later, until profit come back and share price rise and then, use the shelved shares to finance new FAB. Gottfried

To: tejek who wrote (48614)	7/22/2001 10:04:18 PM
From: kash johal	Read Replies (3) \| Respond to of 275872

ted, re:"I don't care how very fixed cost/labor intensive an industry is, when you get into a mess like the one AMD is in the best approach is to shut down the bleeding as quickly as possible. You want to minimize losses and keep your cash intact for the time when the turnaround does come so you can once again pursue market share. Unfortunately, this is not Sanders style and he will push for option 2. That's why the market is selling off the shares. They expect a return to AMD's bleeding days." Option 1 essentially means an exit out of CPU's. Option 2 is ONLY way to go if they are serious about the CPU biz. Its very HIGH risk and high REWARD. Getting to 30% market ensures: Good MB and infrastructure support. Reasonable market share in several segments: desktop and notebook etc. If they only play one segment Intel can leverage other segments to drive AMD out of biz. Grabbing marekt share has been AMDs strategy for a while (and rightly so). Unfortunately they bet on a growing market and a $100 CPU price as viable. Now they may have to recalibrate a business model with $50 CPU's(unless they can get MHZ crown - which doesnt seem likely until hammer). They can get there in several ways to increase value and prices: 1. Bundling deals with MB/CPU/DRAM - will Piss Off lots of partners but a guys gotta make a living. 2. Integrating chipsets with CPU to increase value (buying NVIDIA or ATI may be required). 3. Selling direct to white box shops and cutting out middle men. FYI, I just picked up a HP celeron box PLUS 15" monitor in a box for $599 from fry's. Margins at low end are gonna SUCK for a while - Intel has margins from servers, business, mobiles etc to provide cover - AMD doesn't. regards, Kash