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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (147949)	7/3/2002 3:49:07 PM
From: tejek	Respond to of 1577883

Ted, <AMD has lost share to an INTC who is slashing chip prices at a considerable cost to its ASPs.> Why did AMD lose market share? Think about this one. Had they stuck to their optimistic plans with Thoroughbred, Barton, SOI, and Hammer, they wouldn't be losing as much share. Meanwhile, Intel is pulling forward new speed grade releases of Northwood. You may be right but in this kind of market with a surfeit of inventory, money and price is doing all the talking. It would help AMD if Hammer were here but the real revenue killer is INTC's huge cash reserve. The market is shrinking, for sure, but AMD would have surely survived a price war with Intel had they executed to their original plan. This is what Sanders loved to brag about, that AMD was somehow immune to Intel's pricing strategies because AMD had "the better product" and better execution. Maybe........but in this market, people don't seem to care so much for the better product but rather price. Hasn't that been the reason for tech's malaise during this past year? Despite the cover excuses that AMD management will give, the 33% drop is not entirely attributable to the weak market and the pricing pressure from Intel. It is also the result of poor execution. More likely the result of asking the impossible from engineers who are only human. Probably.......but so what.......in the end, I don't think it would have made a big difference. I might agree if INTC weren't suffering at all but in reality, INTC is suffering alot, and people are afraid its going to warn again. ted

To: Tenchusatsu who wrote (147949)	7/4/2002 11:39:15 PM
From: Dan3	Read Replies (3) \| Respond to of 1577883

Re: Despite the cover excuses that AMD management will give, the 33% drop is not entirely attributable to the weak market Q2 is always heavily back end loaded. AMD has two big OEMs, Compaq and HP, and they merged. Now HPQ has twice the inventory that either company had, and one of the expected benefits of the merger was to consolidate things like inventory to reduce costs. So HPQ doesn't need any more processors this month while they draw down the new, combined, inventory. Intel had much less exposure the inventory effect of the HP/Compaq merger, so they were affected less.

To: Tenchusatsu who wrote (147949)	7/5/2002 5:13:34 AM
From: AK2004	Read Replies (1) \| Respond to of 1577883

Ten re: the 33% drop is not entirely attributable to the weak market and the pricing pressure from Intel. on the contrary, it is very possible. amd's asps are considerably are lower than intels and so are the gms. Example for illustration only: original conditions: amd's asp is $80 and intel's $150 amd's gm is 40% and intel's 60% new conditions: Intel drop prices by $10 and amd by $7.50 result: loss in profit for amd: 7.5/(80.4)=23% loss of profit for intel: 10/(150.6)=10% loss of profit for amd if decline is the same: 10/(80*.4)=31% It is oversimplified example but sufficient to illustrate the point. Revenue would be affected in similar way, just drop gm adjustment. -Albert