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

To: BUGGI-WO who wrote (192728)	4/8/2006 6:14:59 PM
From: gzubeck	Respond to of 275872

Buggi, Intel needs to have quality product in order to destroy margins. I think Intel will find its competing with itself. "If the world bought on cost alone the streets would be filled with Yugos" :>)

To: BUGGI-WO who wrote (192728)	4/8/2006 6:33:50 PM
From: niceguy767	Respond to of 275872

Fabulous post Buggi. Couldn't agree more with your line of thought, being that as mix gets richer, so too do ASP's. The wonderful thing about having only 20% market share and superior product and production facilities is that there exists a HUGE growth potential in the high end. I've tried to come up with a model explaining the $325M revenue increase in Q4, and obviously it relies heavily on an increase in the non-Sempron products as a percentage in the mix as well as increasing non-Sempron ASP's as X2's ramp up. In fact, I'm thinking that Q4 non-Sempron increase was about 1.5M units in Q4 compared to flat Sempron units. The way I see it (i.e. the need for 2M Chartered units/quarter) is that non-Semprons are now the rage and AMD's greatest challenge in 2006 will be in catching up to the accelerating non-Sempron demand...all of which, in all likelihood, spells great news for AMD revenues and earnings in 2006, as AMD Revshare increases to the 25% to 30% range by Q4 from its current (i.e. Q4/05) 15% Revshare level, owing to increasingg units and flat to increasing non-Sempron ASP's. For simplicity, I'm assuming 5M Semprons at $0.50 in Q4 and 6M non-Sempron's at $175M. Going forward, one might anticipate flat Sempron units and rapidly increasing non-Sempron units. If accurate (and the Chartered deal would seem to confirm such a likelihood), it would seem likely that we'll be having to put up with "Mosemann's AMD Phuddolitry" each year for several more years going forward as we have for several successive years already, all the while with AMD's eps increasing from $2.50 this year to $5.00 in 2008 ;-)

To: BUGGI-WO who wrote (192728)	4/8/2006 7:01:44 PM
From: niceguy767	Respond to of 275872

One other point: AMD's Opteron servers (now blades as well) offer the enterprise HUGE economic advantage (i.e. 50% faster, only 1/3 the power consumption, 1/4 the size and 1/2 the price) over the competition. About 12M server chips are required annually, or about 3M per quarter (Note:SUNW plus HPQ supply over 1/3 of the server chip demand). AMD currently supplies about 500K server chips per quarter, leaving HUGE upside potential, given the economic advantages offered by Opteron, with which to complement ASP's going forward. At the limit, AMD supplies 2M server chips/quarter, or about $1.5B to $2B in revenues per quarter from server chips alone ;-)