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

To: Tony Viola who wrote (74644)	3/15/2002 1:12:19 PM
From: tcmay	Read Replies (3) \| Respond to of 275872

Why aren't they profitable? "Not kidding at all. I heard it, everybody heard it that listened to the conference call, or was it the technology update a few weeks ago. Amazingly, some people took off on the "nineties percent line yields" as if it meant real yields. I think it was semiconeng (or was it Fingolfen?) that straightened the whole thing out." Much is made here and amongst other fans of AMD that AMD is the "low-coast producer," that their die sizes are much smaller than Intel's, that they don't have the overhead of Intel, and, cough cough, that their yields are better than Intel's. So, if AMD's yields are phenomenal, and they're the low-coast manufacturer, and they don't have to actually develop new processor lines (being that they follow Intel's lead, since the 29K got cancelled), there's only one question that any reasonable observer needs to ask: THEN WHERE ARE THE PROFITS? AMD should be rolling in profits, should be gaining on Intel, and should be expanding their production facilities. Instead, they're still in the red. If they're not making profits NOW, then WHEN? "If not now, probably never" is my assessment. I recall someone on the Droid thread...I think it was Dan3, but I may be misremembering...the the reason Intel is recording profits and AMD is not is because of what the poster called "accounting tricks." I recollect he was proposing that the SEC investigate Intel's chicanery, to uncover the proof of how Intel is faking its profitability. Occam's Razor tells us what the truth really is: AMD has a good design in the Athlon, but has not had good followthrough on that design and has not leveraged its good design to complete a portfolio and to get design wins at places like Dell. This may change, in that Dell may of course use AMD in some product, but so far there are few signs of this happening. And the P4 now looks to be scaling the way it was intended, while Athlon is being limited in scaling for the very reasons Intel transitioned from the PIII to the P4. And AMD certainly does not have the yields some naive onlookers have claimed. Paul Engel did some calculations, proving the yield claims false, as others have. (But I might face a ban by the censor here if I were to quote his numbers. Find them in the free and open Intel forum.) Bottom line is this: If AMD is really the high-yielding, low-cost producer, THEN WHERE ARE THE PROFITS? Maybe they're concentrating more on the Prophet than on profits, but even Jerryatric Sanders can't keep promising "Wait until the Alzhammer is out!" to his shareholders. --Tim May