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Technology Stocks : AMD:News, Press Releases and Information Only! -- Ignore unavailable to you. Want to Upgrade?

To: Petz who wrote (3047)	12/21/1997 3:18:00 AM
From: greg nus	Respond to of 6843

Petz, If you were a boxmaker would you feel more comfortable buying from a company setting record profits from your purchases or one breaking even. Also your missing the point on expenses. After a chip comes out of R&D and moves to the production stage. The company can make assumptions based on production estimates. One of them is how many they think will make/sell. Cost are then planned for capiitilization over the estimate or immeadiatly expensed. Cost to set up equipment, supply material ect. Auditors will give you a certain amount of latitude especially if your expensing as opposed to capitalizing or defering over chip life cycles. If you want to show early sucess your capitalize everything and overestimate production and Product cycle life. If you guess wrong on cycle life or your comtipetion obsoletes your product your stuck with a current period wirtoff. If your conservative you expesne as much as you can get away with within reason. Every qtr AMD is playing with $550,000,000.00 of such expense juggeling. Just last 1qrt we were told that breakeven was $500,000.00 per qtr. Whitin 6 months it jumped to $600,000,000. The entire increase was in cost of goods produced. What accounts for the increased cost when the production is down? More current qrt expesses disproportonate to production, hence more conservative cost going forward. For those of you who want to follow the .25u industry wide migration being implemented as a cost savings alternative to manufacturing on 12 wafers. Here is a Lehman alalyist discussion on the subject. It also discusses wafer cost. Happy Reading. www4.techstocks.com since I beleive the semi are dead money for at least the 3qtr 98 I have picked up shares of AMAT during the recent selloff. The stock was up alsost $4.00 last week after a 56% correction from $60. It has cycled, double bottomed and about to breakout based on last firdays action.Last trade broke the upper Bollenger band indicating a breakout is emminant. Amat is the leading supplier of .25u equipment and by next year if your not making .25u no one will be buying your last generation chips made on larger dice.. AMD is working over the christmas break because Boxmakers have stopped buying Intel chips in anticipation of the Jan price cuts. Here is some evidennce to support the claim. This story is significnt an will cause the Fridays rally in Intel stock to fail. Puts can be bought at the open monday as this did not make the wire untill after the close. price to slide next week as it will impact Intels revenues and earnings for the 4qrt. Cover two trading days after earnings announcement for maxium effect. Besides boxes not on the shelf in the sotres won't be sold this year. lehman.com