Be afraid.....be very afraid. An analyst agrees with you. Personally, I would not touch AMD, regardless of what any analyst said about its future. It has never been able to make money over a sustained period. Why will it be different this time?
Analyst lowers Intel forecast amid slow 90-nm ramp
By Mark LaPedus
Silicon Strategies
04/05/2004, 12:30 PM ET
PORTLAND--An investment banking firm today (April 5) lowered its estimates at Intel Corp. amid a slower-than-expected ramp for its 90-nm process technology, but the research house also raised its forecast for rival Advanced Micro Devices Inc.
"We are lowering our estimates (for Intel) to reflect desktop seasonality and a slower 90-nm ramp in Q2," said Michael McConnell, an analyst with Pacific Crest Securities Inc., an investment banking firm in Portland, in a report.
"Thermal dissipation issues with Intel's 90-nm process have limited the ramp of the desktop Prescott MPU and pushed out the launch date of the mobile Dothan MPU a month, to mid-June from mid-May," McConnell said in the report. "Prescott is unlikely to comprise 50 percent of performance MPU units by the end of Q2 as targeted; the majority of volume shipments should begin in early Q3."
For months, there have been various reports about the thermal issues with Intel's 90-nm process. Meanwhile, in February, Intel officially rolled out its long-awaited, 90-nm Prescott line of microprocessors, with plans to extend the chip to 4-GHz by year's end. Prescott is a 90-nm version of the Pentium 4 processor (see February 1 story).
Earlier this year, Intel delayed the introduction of its new microprocessor line for notebook PCs after finding problems in the test validation process, according to reports. The processor, codenamed Dothan, is a 90-nn version of the Centrino mobile chip for notebook PCs. Dothan was supposed to be shipped by the end of 2003, but now the product is expected to be available in the second quarter of 2004, according to the report (see January 15 story).
There are seasonal issues for Intel--and AMD. "Our recent checks in the PC supply chain indicated a relatively in-line finish to Q1, with notebook ODM unit softness (down 20 percent sequentially in aggregate) partially offset by a more muted seasonal unit decline (down 5 percent sequentially in aggregate) at desktop motherboard manufacturers," McConnell said.
As a result, Pacific Crest has lowered its estimates for Intel. For Q1 of 2004, Intel is expected to earn $0.26 on sales of $8.15 billion, down 7 percent sequentially from Q4 of 2003. Previously, Intel was expected to realize sales of $8.2 billion in Q1.
The analyst also lowered his estimates for Q2, Q3, and Q4. Intel was supposed to earn $0.26 on sales of $8.15 billion in Q2. But now, Intel is expected to earn $0.25 on sales of $7.9 billion, according to Pacific Crest.
Intel was supposed to earn $0.32 on sales of $8.7 billion in Q3. But now, Intel is expected to earn $0.30 on sales of $8.45 billion, according to Pacific Crest. Meanwhile, Intel was supposed to earn $0.38 on sales of $9.45 billion in Q4. But now, Intel is expected to earn $0.36 on sales of $9.25 billion, according to Pacific Crest.
As a result of Intel's sluggish 90-nm ramp, coupled with stronger-than-expected flash memory sales, AMD's should see some upside on the bottom line despite some lingering concerns.
"AMD's Athlon 64 die size verses Intel's Prescott die size puts AMD at a cost disadvantage heading into 2H04," McConnell warned. "Despite increasing market share in high-density flash throughout last year and having a blockbuster Q4, during which revenues rose 33 percent sequentially, AMD continues to lose money in this business segment."
Pacific Crest has altered its forecast for AMD. AMD was supposed to earn $0.04 on sales of $1.15 billion in Q1. But now, AMD is expected to earn $0.06 on sales of $1.215 billion, according to Pacific Crest.
Meanwhile, AMD was supposed to lose $0.04 on sales of $1.1 billion in Q2. But now, AMD is expected to breakeven on sales of $1.175 billion, according to Pacific Crest.
AMD was supposed to earn $0.06 on sales of $1.215 billion in Q3. But now, AMD is expected to earn $0.07 on sales of $1.25 billion, according to Pacific Crest. Meanwhile, AMD was supposed to earn $0.16 on sales of $1.35 billion in Q4. But now, AMD is expected to earn $0.11 on sales of $1.35 billion, according to Pacific Crest |
