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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Yousef who wrote (28089)	1/24/1998 6:22:00 PM
From: Profits	Read Replies (3) \| Respond to of 1572100

Yousef, Your analysis on AMD's net value is a weak attempt at driving down the AMD stock price. The typical value of a semiconductor company is 3 times revenue. AMD revenues were nearly $2.5B in 1997, and projected to be $5B in 2000. Besides SDC, Fab 25, and FASL (Fujitsu AMD Semiconductor Limited), AMD has 3 other Fabs in Austin: Fab 10, Fab 14 and Fab 15. SDC cost $1B, FASL $1.2B, Fab 25 $1.4B, Fab 30 $1.9B and the other three Fabs are worth nearly $500M. AMD also has a large campus facility in Sunnyvale, a Distribution Center in Santa Clara, Test Facilities in Japan and England, and Assembly Facilities in Bangkok and Penang. And that's just real estate. The real value of a company is in it's people, it's intellectual property (process technology, patents, etc.) it's equipment, etc... And AMD also has a wholly owned subsidiary called Vantis with other $300M in revenue. So therefore I think your analysis is weak. Granted you know alot about process technology, but please leave financial analysis to the experts. Profits

To: Yousef who wrote (28089)	1/26/1998 3:00:00 PM
From: Aaron Cooperband	Respond to of 1572100

Yousef - Re: " I would look to the DEC Fab sale to Intel as a benchmark." Your basic assumption is that the businesses that AMD has built up are relatively valueless on an ongoing basis. Thus, a buyer would only be willing to pay for the personnel, property, and equipment associated with each business. Since AMD's non-logic businesses are close to breakeven and they haven't been overly successful with their K6 effort, I believe that your analysis may be closer to the real number than the value Profits puts on the company. Nevertheless, the truth is probably in the middle somewhere. Using your analysis, I assume that each of their businesses comes as a package including: associated personnel, fab space, necessary equipment, work in progress, inventory, accounts payable, and receivables. In this case, assuming your estimate of $1.2B is correct, you still haven't accounted for AMD's long term liabilities (-$663M), deferred income taxes (-$96M), and cash ($467M) which should be added back. I would add these numbers to $1.2B to get about $900M or $6.40 a share. Re: "Both of these companies would re-direct the business away from the K6 and direct competition with Intel." I agree with this statement. AMD has exerted an enormous amount of effort to take on Intel and has demonstrated how difficult it is to succeed. I can't see TI or Motorola following in their footsteps. Aaron