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

To: Jim McMannis who wrote (103470)	10/22/2003 1:44:40 AM
From: Dan3	Read Replies (1) \| Respond to of 275872

Re: I know what's wrong with Intels .90u but I can't tell you Everybody knows what's wrong with Intel's process - Intel bet that they could beat the laws of physics and do without SOI until .65 - but (so far) they were wrong. Any other company would take 18 months to catch up but Intel can probably do it in 9 to 12. If this is what's going on, it's going to be a long 9 to 12 months for Intel, and at the end of it they may find that they're competing in a different industry than the "we're a controlling monopoly" one that they're used to. Dresden's gone through two expansions and its clean room is now 50% larger than it was in 1999/2000. The 90nm clawhammer Athlon64's are going to be small and AMD should be able to ship a lot of them from the enlarged Dresden FAB - especially since their R&D lines have been moved to East Fishkill. 15 million CPUs per quarter isn't impossible, and if they're in mid range and high end sockets (remember that AMD will have an Athlon64 mobile for thin&light notebooks in Q2/Q3 of next year) that could garner 50% of the industry revenue. They received about 6% this past quarter. An 18% revenue share (and it's almost hard to see them getting that little) would put them at $1 Billion per quarter in profit before taxes - about $2 per share per quarter profits after taxes. At 25 times earnings (strong growth, etc.) that would be a stock price of $200 per share. At 50% revenue share, profits would be over $3 Billion per quarter, $2 Billion after taxes, $6 per share, per quarter. At 25 times annual earnings of $24 the stock price would be $600 per share. That's a (somewhat!) optimistic scenario, but the quarterly $2 per share looks quite doable. This is probably not the best stock for someone to be shorting....