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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (47270)	2/5/1998 5:03:00 PM
From: Larry Loeb	Read Replies (2) \| Respond to of 186894

Here is the relevant article from the DJ wires (although I'm not sure that I agree with some of his "facts"): Dow Jones Newswires -- February 5, 1998 Advanced Micro Cancels 4 Conference Appearances In 1Q By Christopher Grimes NEW YORK (Dow Jones)--Advanced Micro Devices Inc. (AMD) is canceling conference appearances in the first quarter because company officials don't want to elaborate on how its current transition to manufacturing smaller chips is faring. AMD said it canceled a Feb. 2 appearance at a PaineWebber Inc. conference. Nor will it participate in next week's Goldman Sachs & Co. technology conference in New York, the Donaldson Lufkin & Jenrette Securities Corp. conference March 5 or the Morgan Stanley Dean Witter technology conference March 10, a spokesman said. The company made several optimistic estimates last year about how many K6 chips it would manufacture, only to significantly cut those projections later because of production problems. So the company isn't predicting how many microprocessors it will produce in the first quarter. "What we have decided to do is focus our resources internally as we ramp to (production) volume," said Scott Allen, AMD director of corporate public relations. "At this point, we don't have anything to add. It's now a question of execution." The Sunnyvale, Calif., semiconductor manufacturer is switching the size of its computer chips to 0.25 micron from 0.35 micron. Typically, companies aren't able to make very many usable chips when they first start production; most turn out to be duds. As they refine the process, the yield of usable chips increases. Allen said AMD is "not willing to talk about what kind of progress we're making on the ramp to 0.25 micron." But he did say the company has been "candid" about the challenges it faces in the product transition. When AMD announced its fourth-quarter earnings Jan. 13, Chairman Jerry Sanders described the product transition as a "high-risk, high-reward strategy." Beyond that, Allen said, the company isn't saying anything until at least March. "We have told the world in no uncertain terms what our most significant challenge is." Ashok Kumar, an analyst at Loewenbaum & Co., said AMD's decision not to appear at the investment conferences isn't particularly unusual. AMD's archrival, Intel Corp. (INTC) has done the same thing on occasion, he noted. "They don't want to have to promise soemthing and not deliver, so it makes sense from that perspective," Kumar said. AMD missed a couple of chances last year to make some headway in its fight against Intel and its 85% market share. While AMD's K6 chip is comparable in performance to Intel's more expensive Pentium II chip, the company had problems making enough of the 0.35 micron version. So AMD is moving quickly to start a new, 0.25 micron assault on its rival. Given the difficulty of ramping up a new product, it's a risky strategy - one Kumar likened to "setting your hair on fire and putting it out with a hammer." AMD has been successful at finding customers for its chip, however. In January, Compaq Computer Corp. (CPQ), the No. 1 PC manufacturer, said it would start using the K6 chip in some models. Other big manufacturers using the K6 include International Business Machines Corp. (IBM), Acer Computer International (ACI) and Fujitsu Ltd. (FUT). AMD shares were at 19 1/8 in late trading Thursday, down 7/8, or 4.4%, on volume of 2.1 million shares, compared with average daily volume of 1.7 million. -By Christopher Grimes; 201-938-5253 Larry