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To: Brian Malloy who wrote (40294)	11/13/1997 8:17:00 PM
From: Barry Grossman	Read Replies (1) \| Respond to of 186894

Brian & thread: Re: AMD Evidently some analysts think there's still hope for AMD. K8? Spectacular growth in 1998? It's difficult to believe this stuff but here it is anyway: marketinvestor.com AMD's Microprocessor Business Remains Intact 07:34am EST 13-Nov-97 While the departure of Vinod Dham, VP Of the AMD Microprocessor Business Unit, is a short-term setback for the company, analysts believe that this event will not have a material impact on the long-term growth prospects for AMD in the microprocessor business. Two longtime AMD Microprocessor Group executives (Larry Hollatz & Rob Herb) will jointly carry out the business unit operating functions until a permanent replacement is named. Analysts emphasize that Greg Favor, the design architect for the AMD K6 remains as head of the company's future K8 design effort; while longtime AMD design team member Larry Hollatz is in charge of the K7 processor development. Analysts continue to highlight analysts' key investment theme that AMD represents an attractive large cap value investment theme with diversified growth prospects in the processor, flash memory, PLD, and telecom/networking chip business. The steady growth in the non-microprocessor business will be augmented by potentially spectacular growth in AMD's processor business in 1998 as the company ramps up production of the K6 to capture 10-12% market share and competes at the mid-range and high-end of the desktop and mobile PC processor market with Intel. The stock is attractive relative to book value of approximately $14 per share with AMD's non-microprocessor business alone being worth $20-25 per share based on a conservative 18x multiple on non-microprocessor business segments collectively having earnings power of $1.00-1.50 per share in calendar 1998. The expected success in the K6 microprocessor business would represent an additional $1.00-1.50 per share in earnings in calendar 1998. At AMD's analyst meeting, the company had indicated good progress on ramping up the yields and speed grades on the K6 chip; very good initial results with the next generation 0.25 micron technology for future higher speed K6 processors, a great roadmap for future K6 processors, and strong demand for the K6 which exceeded AMD's ability to produce the chip. Analysts are now estimating 1.5 to 1.6 million units for the fourth quarter at a blended ASP of $135 per chip relative to 1 million units @ an ASP of $150 in the prior quarter. Separately, IBM announced a new line of very attractively priced Aptiva consumer PCs with the AMD K6 for the holiday selling season. AMD indicated that another top 10 PC OEM (perhaps CPQ, HWP, or Toshiba etc.) will likely announce use of the K6 this quarter. AMD's non- microprocessor business such as flash memory, PLDs, and telecom/networking chip business will likely be flattish relative to the Sept quarter. =========================== FWIW, Barry