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

To: Dan3 who wrote (48703)	7/23/2001 1:13:05 AM
From: Cirruslvr	Read Replies (2) \| Respond to of 275872

Dan - RE: "Yes, but you seem to be under the impression that it has to be paid for years in advance." No, but they have to secure funding ahead of time. Whether that is by issuing more bonds or borrowing from banks, their debt will go up. My original point was while AMD's long term debt went down recently, it will go back up when during the process of building a new fab. And they are currently looking at where to build a new fab, so the process is beginning. "They'd love higher ASPs, but they can execute their business plan at $75. And that includes continuing to fund and build new FABs and taking 30% market share." Dan, with the current situation, either their ASPs will stay or go up and market share will go down significantly or they will shoot for 30% market share at a MUCH lower ASP. Either way it doesn't look too pretty. "If AMD pumps out 6 million morgans from Austin and 9 million Athlon MPs and Athlon 4s from Dresden in each of the first few quarters of next year at $75 ASPs" What situation would lead to AMD producing 50% more high-end processors than their low-end processors? Where is the market for 9M Athlons when AMD sold 7.7M TOTAL processors while stuffing the channel in Q2?

To: Dan3 who wrote (48703)	7/23/2001 1:22:46 AM
From: Paul Engel	Read Replies (2) \| Respond to of 275872

Re: "If earnings are as low as zero for a year, they are accumulating cash at a rate of about $700 million per year through depreciation.." Why don't you explain how this depreciation generates CASH when there are NO EARNINGS ?

To: Dan3 who wrote (48703)	7/23/2001 4:28:36 AM
From: ptanner	Respond to of 275872

Dan, Re: "If earnings are as low as zero for a year, they are accumulating cash at a rate of about $700 million per year through depreciation" Well, depreciation is offset by reinvestment of cash in new capital facilities. AMD has proudly noted in past CC that depreciation and capital expenses were about even. But, this past quarter the latter was considerably larger so there was a net loss of cash from this area. See: amd.com From JC's AMD 2Q01 CC: Our cash balance ended the quarter at 1.1 billion, down 200 million from year end. Over half of this decrease from from nonrecurring investment in our FASL joint venture." So, even with profits in 1Q and 2Q AMD's cash balance has declined. Of course, they will save $7.5M per quarter from the old 6% convertible bonds. <sarcasm>This might cover permitting for the new fab but not the engineering </sarcasm>. -PT, P.E.