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

To: Dan3 who wrote (248263)	3/3/2008 3:55:06 PM
From: wbmw	Read Replies (1) \| Respond to of 275872

Re: A great example is 2000/2001, where Intel was scrambling to restart its production investment program in reaction to AMD's terrific success with Athlon. After that, when AMD ran into problems with Thoroughbred in 2002, Intel slashed investment. Again, the numbers you are quoting refer to "Additions to Property, Plant, and Equipment". It goes up when Intel builds new fabs, and it goes down when Intel leverages existing structures. Actually, that's a perfectly adequate explanation for why the figures fluctuate, without having to invent contrived explanations about competitive responses. In fact, given the lead time it takes for these investments to be effective, it can't possibly coincide with a competitive response. If AMD released a brand new architecture tomorrow that was 50% faster than Intel's top parts, by your reasoning, they would beef up their "Additions to Property, Plant, and Equipment". That would translate to a decision to build a new fab, which would take years worth of construction and fitting with the newest process equipment, and you may get wafers out of it 4 years down the road. And when that finally happens 4 years later, all it means is more wafer output, not necessarily a stronger product line. As a competitive response, that's why it makes no sense. It makes more sense to alter their investments in R&D, so at least they can come up with a new product that is capable of regaining leadership from the hypothetical 50% higher performing AMD architecture. That's why I suggested looking at R&D to gauge whether Intel is "responding" to AMD by altering their investments. And clearly, it conflicts with your theory, because Intel's R&D investments have been in a general upwards direction over the entire time horizon. Sorry, Dan, there's just no way you can reconcile the data into a logical connection with your theory about competitive responses, no matter how many times you try to rephrase your hypothesis. It just doesn't work.