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To: Tenchusatsu who wrote (140100)	7/25/2001 6:21:58 PM
From: pgerassi	Read Replies (3) \| Respond to of 186894

Dear Tench: Simple! AMDs processor revenues are less than $1B a quarter. So adding in servers could increase their business 25% or so. However, I do not count 1-2 way PCs as servers in the traditional sense. 1-2 way PCs can be combined to make servers but, they have a far bigger market on their own. Namely, the high end PC and workstation markets. Could 1-2 ways completely take over all three markets, High end PCs, Workstations, and Large Servers? Yes they can! They could easily pick off 99% of those markets LT. 1U sized systems take care of computational bound tasks and 4U or 6U sized systems to take care of I/O or storage bound tasks. Systems interconnect will be easy and straight forward. HT will probably make the interconnect even easier and faster. The first two have a much larger market for CPU chips. Also, one thing that Mary forgot is that you can make money from servers by providing things other than CPU chips. Chipsets, SRAM memory, communication chips, and PCI interface chips are just some of the other chips that mean a greater slice of revenue just less GM but possibly more revenue and profits in absolute terms. Intel is already doing this and the revenue from them could even exceed the server CPU revenue. 1 8 way server may have 1 CPU in it but, it has 1 PCI interface chip for each 3 or 4 slots, plus at least one in each PCI card installed. At $5 or $10 each no matter what CPU is installed, it quickly adds up. Remember that GS320 from the TPCm quote? there were 100's of controllers, each of which probably had more than 1 PCI chip in them leading to $5 or $10K easily even though it did not have a single GP Intel CPU in it. Heck they may have had 100's of 386 embedded CPUs in them as well at $5 or $10 each. Just because the CPU chips sold by the primary divisions may be $1 or $2 billion does not mean that another $1 to $2 billion could be in these lower margin chips in the server quote. Matter of fact, it is likely that the total semiconductor portion of these large servers is at least 10% of the total, if you include those used by the vendors to the OEMs. The only thing I was taking Mary to task was that CPU chips alone made up 25% of that number. Total GP CPU revenue (PCs, servers, workstations, and mobile) probably does not exceed $22 billion a year. That is about $5.5 billion a quarter. Between Intel and AMD, they get about $5 billion of that number. Everyone else takes the remainder. It is far more likely that AMD server revenue will be mostly taken from Intel and very few here would disagree with that (magnitude maybe but not the source). It may not be much revenue but, it is probably much more in terms of profit. An extra $200 million would look good to either Intel's or AMD's bottom line. Especially now. Pete