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

To: BUGGI-WO who wrote (198839)	5/26/2006 5:45:02 AM
From: Rink	Respond to of 275872

(EDITED) Buggi, re: I don't know how fast Spansion could rise prices because of contracts, but we have seen in the past, that these contracts aren't a price protection, when the markets goes down, why not reverse this too? I don't know why the reverse doesn't happen but I do know it seldomly happens so I'm not counting on it. I'll ofcourse resign to being content when I would happen to be wrong about this ;) If however a reasonable broad range of spot prices would go up somewhat over a larger period of time Spansion goes up significantly as well. Firstly because of the largely wrong perception of people that it'll earn much more money in the short term, and secondly because of the largely right perception (both are just my opinion of course) of better longer term profits (contract renewals will be done at better prices the longer the spot prices up). I have no need not to be cautious so I believe Spansion will turn green in Q4 - I really do think chances are much higher for this to happen in Q4 than in Q3. Spansion is my less risky investment (Intel 90nm capacity that will be freed up will is Spansion's greatest risk). In this capacity I see it as a much appreciated contra weight for my riskier AMD investment. That is my perception at least. IF however you would turn out to be right then it'll probably have the kind of influence I think you're thinking of. EDIT: Lastly there's one factor that I don't weigh in much that can cause better than expected profitability in Q3 and that is significant shipments from TSMC in Q3. The current expectation is that TSMC's fab will ship some 110nm products this Q, and that there will ramp to significant volume in Q4. Q3 is in between. No idea how high semi-significant volume will be. Also part of the TSMC volume is needed to decrease volume in fab 25 during the conversion to 65nm. Too many unclear factors (unclear for me that is), but at least those factors are controlled by Spansion and are extremely unlikely to lead to a decrease in output. I'm treating this factor as non existant until I have better insight in how to weigh it in (this is the only aspect I think I might be too cautious about). re: Q3 could be? a small surprise, the same for AMD, when we don't see any losses in the AMD P&L. Apart from 'Other', and 'Minority interest' also for the time being, we won't see any losses in AMD's P&L for quite some time. If Minority Interest would turn green in Q3 you'd be right that it'll influence AMD because Spansions portfolio and outlook are strong (so prospects of losses in that line then decrease drastically). Regards, Rink