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

To: pirasa2 who wrote (238451)	8/9/2007 12:29:51 PM
From: graphicsguru	Read Replies (1) \| Respond to of 275872

Pirasa, I don't understand your reply. Yes, of course, inventory is on the books at cost. But its market value changes day to day. And when your competitor is increasing its clock speeds much more rapidly than you are, the market value (not book value) of your inventory is dropping quickly. So you try to sell it when you can. You don't hold onto more than you have to. That way, you minimize inventory write-downs, like AMD took this quarter on their remaining (and numerous) S939 parts. And you also turn as much inventory as you can into much-needed cash. When Buggi can buy 3400+ for 16 Euros, it's obvious that that prices have not stabilized at all. A year ago, it made sense for AMD to intentionally hold onto some parts from Q1 to Q4, so demand would catch up with production. Today, that would be very foolish.