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

To: Elmer who wrote (85288)	7/18/2002 2:10:40 AM
From: Monica Detwiler	Read Replies (1) \| Respond to of 275872

It just looks hopeless in my view and after so many years of watching this competition it's almost sad to see what looks to be inevitable Sounds like AMD's oxygen supply is being cut off. Monica

To: Elmer who wrote (85288)	7/18/2002 2:20:50 AM
From: wanna_bmw	Read Replies (4) \| Respond to of 275872

Elmer, Re: "Intel is developing multiple versions of Itanium simultaneously as well as multiple versions of P4 (and P5?). AMD is losing money hand over fist and can't possibly fund similar projects." What makes you so sure that they don't have a K8+, or even a K9 design team simultaneously working on their part in the product life-cycle? Look at AMD's R&D costs. They are greater now than they ever have been. You can't seriously think that they are not funding additional projects at this time. I would, of course, expect the staffing to be minimal, but I would expect a .09u Hammer chip to tape out close to the time when the first Hammer launches. There must obviously be design teams in place going through the pre-si design and validation cycle already. By now, I would also expect K9 to be primarily architected by AMD's Best and Brightest, even if actual design hasn't formally started. So much groundwork needs to be laid before projects like these can get off the ground. If all AMD has to work on is Hammer, then they have eaten their entire future. I seriously, seriously, doubt that is the case. wbmw

To: Elmer who wrote (85288)	7/18/2002 3:06:33 AM
From: Joe NYC	Respond to of 275872

Elmer, Why design in a product from a company with a questionable existence and no money to develop a follow on? Intel is developing multiple versions of Itanium simultaneously as well as multiple versions of P4 (and P5?). AMD is losing money hand over fist and can't possibly fund similar projects. AMD is losing money precisely because it is funding multiple projects, and there is a lag before these projects bring additional revenue. That's why the current expenses are in 900M range, as opposed to approx 700M about 4 years ago, before the sale of non-CPU/flash divisions. These expenses are long term commitments. When the decision to fund these commitments was made, it looked likely that AMD would be easily able to sustain $1bln level revenue, actually, it was about the time of the irrational exhuberance, when the expectations were probably even higher. Instead, we got the Internet bubble crashing in 2000, taking down all of techs in 2001 and 9/11 prolonging the tech depression probably by at least a hear year. So AMD got caught with all these commitments, and suddenly found themselves totally outmaneuvered on the revenue side, probably worse that the technological disadvantage at the moment would dictate. As far as anybody making commitments to AMD, the ones that AMD needs to achieve a break through in sales - OEMs - never made any commitment to AMD. They committed no more than an average screwdriver shop is committed. So what you say AMD may be losing, is something AMD never had, so it is impossible to lose. AMD has always been a one night stand for these OEMs. As far as AMD surviving or not, I am not sure how much can be read into 1 quarter (previous 3 were fine considering the circumstances). AMD's sales now on the CPU side are at the same level as they were in Q3 1999, and but AMD is in far better competitive position than they were in Q3 1999. It seems to me that AMD forgot the strategy that allowed it to survive in K6 era, and got completely taken to cleaners this Q by Intel. The hypothesis that AMD does not survive rests on the fact that AMD continues to be clueless in marketplace between now and the arrival of Hammer, and on the fact that Hammer flops. The case for the longs, realistic one, is that AMD loses another 300M, with 100M upside (to 200M loss), Q4 is 200M loss, with potential upside of 100M, at which point AMD reaches the point of maximum volnurability, with cash down to possibly below 500M, but Q1 is at breakeven and Q2 2003 is profitable, roughly following 2000 schedule of company performance. So what am I doing about this situation? I sold more than half of my posision between $9.30 and $9.60 and have calls (July and August) against remaining shares. I think I will just leave them alone for now, possibly buying back the August calls on a dip. I have a feeling that things will get a lot worse before they get better, so I will probably cut my position in half (again) on a rally. As crazy as it may sound, I have a feeling that the tech stocks will lead the next bull market, whenever it finally happens. I think we went from a phase of technology being answer to everything, and corresponding overspending to the current state when everything tech related is viewed with suspicion, and current underspending. Some period of this underspending will create a technological deficit, a long backlog of needs that are being put on hold. On any sign of recovery, a green light will be given to a lot of these projects that are currently on hold, and a new wave will be started again. When? I don't know. It could be Q1 2003, it could be postponed by outside events (Al Qaidada, Congressional action), but the longer we stay in the state of anemic growth / stagnation, the stronger the recovery will be, and the techs will lead the way. Joe