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

To: Sarmad Y. Hermiz who wrote (197434)	5/18/2006 10:08:36 AM
From: combjelly	Read Replies (3) \| Respond to of 275872

"Can you expound on that concept ? It doesn't seem obvious." Sigh. Ok. Unfinished goods are valued at what it has cost t produce them to that point. It costs somewhere around $3k to process a wafer. Assuming a die size of around 150mm^2, that means each unpackaged, untested die is valued at something less than $7 each. For 200mm, it would be closer to $15. Once packaged and tested, the value in inventory is whatever it will sell for, which for AMD averages somewhere around $95. Now, Q1 is typically a down quarter compared to the previous Q4. Q2 is even further down. So the pressure to carry packaged and tested inventory is low, since it won't be used. It is common for both AMD and Intel to build up their inventory of unpackaged and untested die during these quarters and start packaging and testing during Q3 to meet the greater demand. If you don't have command of these facts, then you can't properly analyze what inventory levels tell you. The crucial bit of information is what percentage of inventory is in the die bank as opposed to ready to ship to customers. So far, you appear to be ignorant of many basic facts of the industry. That is ok, we are more than happy to inform people. But when someone comes here with no knowledge of these facts and tries to "prove" that AMD is in trouble, then we smell a troll. If you had phrased your "analyzes" as questions, you know, "It seems to me that Fab36 production didn't show up" as opposed to stating things as a fact, I'd have treated you differently.