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

To: Robert Walter who wrote (3358)	1/3/1998 2:30:00 PM
From: greg nus	Read Replies (2) \| Respond to of 6843

Stockman, Read Walters post about Flash. When does Intel plan to announce 1.8volt flash? I though AMD would post (0.25) loss. but the stock is trading up maybe they will post (0.9) or surprise with break even. More important will be the % increase in CPG revenues. Increses there and in flash will hold the stock were it's been. Short term AMD appears to be focused on market share growth rather than earnings. This is smart because since the stock price is already beat down AMD can pretty much price any where they want without worry of further damage as it's all be done. Further facts have come out to support my previous conclusions that Intel is panic pricing a weak product PentumII. In 96 CPU' growth declined 10% intel grew just fine at AMD expense as AMD did not hapve a competive K-5 offering. In 97 AMD upset Intle apple cart with the K-6 but more importantly the CPU market was expected to grow 30% turns out growth was only 7%. With grow so weak and AMD to compete with, Intel ahd no other choice but to drasticaly drop prices in an attempt to get any sequential growth over previous Qrt and 96 performance. What screwed them up was weakness in Asia, Japan, and slow Europe, in the states they misscalulated the sub $1,000.00 sucess Compaq was posting. When they missed there number in Qrt 3, panic finally set in that in order to even keep growth flat they would have to cut, cut, cut, and cut they did previously unpresidented rapid fire cuts. Tacticly Intle errored with the introduction of slot1. Component bundeling ala cartdrige was designed to eak out the slighest improvements in performance on a design pushed to it's engineering limits. Also to prevent user's from upgrading cheaply to AMD. Intel intended to pass the extra cost of the cartridge along to it's dumb customers. This is taking place right at the same time that socket seven demand is being driven higher from sucess with the sub $1,000.00 market segment Intle totally ignored. While the marketplace shifts seeking lower cost alternatives Intel continues to play yesterdays ballgame. Now Intel has lost its stock market momemtum, it's stock price multiple is contracting as past growth of 30% is not sustainable suporting a 24 PE is not sustainable. Growth has shrunk to 9%. Intel choice now is to cut prices, which cut margins which cut earnings with cut pe multiples which cut stockprice, all to maintain market share. AMD however is a much different senerio. AMD does not have to worry about stock price. It's weak stock price gives it an advantage. AMD Competive product for the sub $1,000.00 market can modestly price to a small profit, continue to ramp production enjoy association with socket 7 low cost componets pricing look forward to prices droping for motherboards and on board chip componets, while buliding market share. revenue growth may turn out to be a more important factor then earnings for AMD, as the entire Tech sector is in shambles anyway. AMd's stock price will rally in sympathy with ther rest of the sector when the tiem is right. At AMD stratigicly for 98 market share should be a higher priority than earnings. AMD's capacity is growing rapidly with Fab 25 underutliized but ramping rapidly and Dresden comming market share ultimalty must grow for AMD to lower unit cost by spreading fixed cost of operating the fabs over more chips. From market pricing standpoint tacticly I would price just above break even and let the chips fall where they may. I would try to dominate the sub $1,000.00 with the most power I could muster for the buck. The sub market represents an industry inflection point with the potential to increase sales 10 fold. It has the potential to wire the mass unwired. The sub market will eventuly spread to the coprorate market because in theory the corp market should be even more price sensitive than the comsumer. For Intel the sub market means it must turn it'slef upside down or better stated rebuild it's self from the bottom up rather than the top down model it has followed in the past. For AMD it means continuing to following Sander's five year plan to build 50million chips at a cost of $25.00 and sell them for $100.00. He is in at the beginning of year 3(98) of the plan from what I can gather. the plan should go exponential beginning in year 4(99) and contiue in year 5 (2000).