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

To: Petz who wrote (77565)	4/17/2002 8:27:27 PM
From: milo_morai	Read Replies (3) \| Respond to of 275872

<font color=red>CC Notes via TMF (very long) These notes are being written on the fly, so there is no analysis included. Not all quotes are direct. I summarized what some people said as they spoke. This is the WHOLE CC not a summary of the most important parts, so you will have to do a little searching to find the big news, but rest assured it is in there. Bob $902 Million in revenue 8 million units sold, marketshare gained, $684 million in revenue ASP of $86 dollars, partly because of increased Duron sales BEP continues to be reduced GM was 36%, driven by cost reduction and .13 switch Cash balance is $1.3 billion, up $400 million. +$160 million cash flow Inventory down slightly, well position CAPex $850 million for year (including completion of .13 in Dresden by end of year AND CONVERSION OF FAB 25 to .13) Hector Conversion to .13 is ahead of schedule. Completion expected 1Q ahead of time Ramp, yield, and performance are in a good trend for hammer Fab 25 will be 100% flash by year end Mirror bit will sample Q2 and sell 2H02 AMD will use UMC's 300mm process at .13 and .09 before the JV opens Jerry Gained 1% of worldwide marketshare Unit sales may be down 5%-10% 2Q Marketshare gains are problematic in the near term because of economy AND DELL Sales expected to grow significantly as market improves. Will hold marketshare until then Working Silicon for Sledgehammer on .13 SOI. 9 layers of copper interconnects. Intro in 1H03 Clawhammer should ship by end of this year .09 Clawhammer samples expected by end of this year, with mobile intro slated for mid 2003 Flash should improve in 2Q, and dramatically improve after that Flash should make a positive contribution going forward Q & A Forecast for Server market growth in q2 Jerry: We're just getting started. Volumes in 100,000's range. Strategy is to look for “low hanging fruit” first. Work with white box makers to provide high performance for low cost. Hammer is key. Flash Jerry: We are gaining share with the major users of flash. They are realizing that AMD will be a long term provider of the lowest cost product. Inventories are final down in industry. How will 3400+ compare to Intel's Q4 offering Jerry: It is our intention to always have competitive products. Hammer necessary for 3400. Hammer ships in Q4. Substantial revenue in Q103 How do you trade off marketshare for profitability Jerry: Tough market to gain marketshare. Dell is gaining share in PC space. Maintaining marketshare is an impressive accomplishment for AMD. Increased mobile sales will help with Marketshare. AMD does not have a large enough marketing presence in China and India. Intel is a bigger player their. We are not proud of our achievements in china. We are not a player in India. We just need market opportunities. We do well where we have a marketing presence. Is flash pricing stable<BR><BR>Jerry: Yes at crummy levels What clock speeds is hammer sampling at Jerry: We are not going to talk clock speeds. They are being limited by anomalies which are being worked out. Hammer to be introed at at least 2GHz What is BE now Around $900 million or below. Closure of FAB will occur this quarter. Q2 revenue down, unit drive or ASP driven Jerry: Hard to predict. Intel plans to be aggressive in pricing. Not knowing what that will be … we are reluctant to offer a guess. We are selling all Athlons we are building. Nearly 80% of revenue comes from Athlons. Pricing will be under pressure. ASPs will not be up. Acceptance of Nforce Jerry: The world loves Nforce. It is a great, great product. We need to get more out there. They charge more money, so it is hard with price sensitivity. Will marketshare gains come from Duron? Jerry: More Durons shipped 1Q vs 4Q, slightly fewer Athlons shipped. High end sells out and low end sells out but mid ground is a little tough. Athlons will be a little better this quarter and Durons will be a little worse. Is there a gap between current products and Hammer. Will Intel take advantage Jerry: Intel is increasing its introduction of high performance parts. There will be times when either one of us have an advantage. Hammer should once again give us a clear edge in desktop space. What were ASP trends in the quarter Blended ASP was $86 down from $90 in Q4 Comment on Flash Jerry: Orders were stronger for flash. Most design wins at 64-Mbit and 128 M-bit. Roadmap is what is attractive to customers. Multichip packaging capability for some customers. Flash density expectation in wireless Jerry: Don't want to comment for competitive reason. Should have lower cost per bit than Intel. Nokia was once 100% Intel, now AMD has some business. Mirror bit has direct impact on Flash profitability. Is HP Compaq causing turmoil Jerry: Market isn't growing and Dell is gaining share, thus AMD's market is shrinking. Working diligently on Hammer family so we are not limited by mobos or chipsets at launch. MP has made some inroads in server space. We are not giving up on Dell. Hammer is a great opportunity. Hpaq will be a stronger competitor with Dell. We STRONGLY support the merger. Do you expect a normal year Jerry: Oh yes. I hope that the replacement cycle will be coming soon. How much did mobile units grow Jerry: I think over 800,000 units. Yes, they just passed 800,000 units. More than 10% of unit shipments ATI Jerry: We have lost some design opportunities because ATI had been late with chipsets. Has Stmicro gained share Jerry: They can't compete with strataflash or mirrorbit. They are yesterdays news. GM in 2Q and 2002 Jerry: We don't enjoy monopoly power so GM is dependent on revenue. We're not going to comment on gross margin. Faster than expected .13, what kind of cost savings Hector: Pretty high level. .13 roughly doubles die available. Added cost, but potential candidates override this cost. Time to money is far exceeding expectations. Yields are going well. Where will Durons be made Hector: Our plans are not to manufacture Dresden. Our plans are to be 100% Athlon by end of year. Jerry: Only difference between duron and athlon is cache and bus. No real cost advantage. Missed a question or two due to work :) Jerry: Sweet spot is in 1800+ range and up Timing of transition on flash .13 Hector: We intend to begin limited sampling of .13 flash this year, with production next year. UMC .13 process Hector: We expect to qualify Athlons at UMC in 2H02 and begin production ramp. I expect production shipments to commence next year. We expect demand for hammer to mean that FAB 30 will need to be committed to hammer production. What do you think PC unit consumption was Where will unit decline be for 2Q Jerry: I think server will be up because it is a small market. Desktop definitely will not be up. Mobile should be good. Could you comment on MS hammer support and testimony Jerry: The press tried to tie my testimony as a favor to Bill. I was happy to testify for Bill, the favor wasn't testifying. We are not prepared to say when they will make a public announcement. We are highly confident they will support this. They have samples and they are pleased with the performance. What is the pricing on mobiles Jerry: We don't want to give it out. Frankly, it is irrelevant. Total is important thing. Will you hit 2.2 GHz in 2H Jerry: Absolutely. We have plenty of headroom in Athlon and will be able to do things with the architecture to improve model numbers. You'll note that Intel is now putting an “A” on some processors i.e. model numbers. We believe we will be able to improve architecture and clock speeds. We expect Intel to due the same. 80% of revenues from Athlon? Jerry: 80% of processor revenues not total Will Q2 be profitable Jerry: If we make $900 million we make money, if not, we don't make money Were flash units up and revenue down Yes, pricing was grim But you do think pricing will stabalize Jerry: We have a richer mix and prices are stabalizing. Comment on Break even reduction Jerry: I don't think we should comment. I think we stated we would reduce BE by 125-150 million. We are also spending at record levels for R&D. We are focused on a balance of building for future and breaking even. Missed Question Hammer is unique solution. With same bios you can boot as 32 bit or 64 bit OS. We are going to position sledgehammer against Xeon and Itanium and Clawhammer as a P4 killer. Athlon will be viable as long as it delivers performance at the price point. Missed Question Jerry: We do not record revenue until it has been sold by distributor. We are doing well in Norht America, Europe and Japan. We are not doing as well in China, Latin America and India. 65% of sales outside of US Comment on mobile market share gain Jerry: In short term we have a performance advantage. I expect to see improvement, but design cycles are longer for mobile. .13 micron chip announced today. Smaller guys can turn around product cycle. TBRED will be more of a benefit at the end of the year. Comment on mix of Durons and Athlons Jerry: 4.5-4.7 Athlons. Balance was durons.<BR><BR> How back end loaded is 2Q Jerry: More than 50% of sales in the back end. Jerry: This has been the 119th CC I have participated in. Over 30 years. I will not be participating in the next CC. God Bless. End of Call Regards, Rob --------------------- From TMF Milo