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

To: maui_dude who wrote (58279)	10/11/2001 2:49:18 AM
From: pgerassi	Respond to of 275872

Dear Maui_dude: Re: "Now this is where I think you have totally lost your perspective. What difference does it really make if Intel sells 15 million in Y2001?" Would you say that if Intel stated that they should sell 20 million P4s CY01 and only sold less than 10 million P4s CY01? The difference would be in the $1.5 billion top line and $750 million to $1 billion on the bottom line. That is a big hit. Re: "What difference does it make if they sell 20mil for the year a quarter later?" About $1 billion in lower profits, since that is how much their ASP slips for 1 quarter. Given the speed of the P4 ramp in sales at 1 million a quarter (est at 1 million Q1, 2 million Q2, Q3 appears to be somewhere around 3 million) that gives Intel 4 million in Q4 for a total of 10 million for CY01. Q4/01 would be a big hit in revenue as P3 sales drop per Intel's stated plans. Take it further, 5 million P4s in Q1/02 or 15 million a quarter late. Added are 10 million Celerons and 2 to 3 million rebadged P3s (0.13 Tualatins sold as Celerons). 17 million CPUs for a quarter would be a huge stake in Q1 revenues (probable losses unless Intel restarts 0.18u P3s). 6 million in Q2/02 (21 million a couple of quarters late) the rest Celerons of various grades. Revenue down, ASPs down, gross margins down, profits now big losses, stock price near book (single digits) and market share just 66%. I could go on, but even short delays can mean the difference between profits and losses. Given the high P/Es and P/S ratios, Intel could crash. The scenario above would cause a big shake up at Intel and both the P4 and Itanium would be cancelled as P3 line would be fired back up to get them back to black. Re: "Do you actually believe that P4 is not going to dominate?" If the Corporations do not buy P4s and the Consumer doesn't in the quantities necessary for profits, what does it matter what Intel would like to sell? Intel must sell what the market is willing to buy or they are out of business. If the market says, "we will buy P3s and Celeron3s, but very little P4s!" How long do you think Intel would swim against the tide? For 1 quarter of $1+ billion in losses? 2 quarters, 3 or more? Re: "Do you actually believe that AMD will not lose market share over the next few quarters?" If AMD sells all they make for the next few quarters (they are maintaining a ramp up) and the PC market doesn't expand (by all accounts it is still declining both in units and revenue), Intel will lose unit share, not gain it! In a declining market, Intel gets hit worse it gets less per CPU and sells less CPUs anyway. If the market is about the 30 million forecast for Q3 (15% QoQ) and AMD sells about 8 million, how many are left (AMD sold 7.7 million in Q2 and the total WW was 34.5 million) for Intel? 22 million from 26.8 million. At lower ASPs, yet. All that would have to happen is a mere 1 million units from Intel to AMD to get AMD to 30% unit market share in a flat PC unit sales period. You sure AMD will not make another 1 million a quarter in a few quarters especially with the complete transition to 0.13u by Q4/02? Re: "Face it, if Intel gets in trouble with their earnings, AMD wil be deep doo-doo. The longer the economic problems, the worse AMD will get hurt." What if the market correctly perceives the reason for Intel's declining earnings is mostly due to AMD? Then AMD would get an actual boost from Intel's woes. And if they see that Intel losses are due to Intel's problems, they they may finally separate AMD from Intel and look on each own's fundamentals (and then, Intel will be hit really hard). Re: "For as long as economic troubles last, Intel will continue to focus on the market share (and see AMD lose money)." How long will Intel be in the red (a mere $350 million hit to a quarter's revenue would put Intel into the red GAAP wise (Pro Forma would need about $750 million to go into the red (about 12%)) or about 6% (1 week is about 7.5%)). Any shortfall of a mere $0.03 EPS in Q3 and Intel may face another round of lawsuits as its shares could just drop off a cliff. Are you sure you do not want to jump ship? Pete

To: maui_dude who wrote (58279)	10/11/2001 8:19:17 AM
From: niceguy767	Read Replies (2) \| Respond to of 275872

maui: "What difference does it make if they sell 20mil for the year a quarter later ?" Indicates that even INTC management can be on some other planet when it comes to their estimates and, more importantly, indicates that P4 sales are an uphill push contrary to hype/expectations. "Do you actually believe that P4 is not going to dominate ?" P4 will not achieve the "heady" targets established by management and as a result, 2 years out, AMDwill have achieved its 30% or better market share. "Do you actually believe that AMD will not lose market share over the next few quarters ?" I actually believe that INTC has lost much if not all the leadership edge that existed prior to Athy and consequently, AMD will continue to gain market share. "Face it, if Intel gets in trouble with their earnings, AMD wil be deep doo-doo. The longer the economic problems, the worse AMD will get hurt. If you are more interested in making money than see Intel get hurt, you should really hope that Intel recovers. For as long as economic troubles last, Intel will continue to focus on the market share (and see AMD lose money)." Of course the economic downturn affects everyone but INTC's ability to inflict financial hurt on AMD is not nearly as great as you seem to believe now that AMD's cost structure is lower and AMD's product lineup equal or superior...