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

To: Petz who wrote (29382)	3/3/1998 7:30:00 PM
From: StockMan	Respond to of 1574002

Petz, Re -- If a K6 wafer only has 75 good chips (less than 70% yield numbers being spouted about), they will have, at most, $750, in additional packaging costs and be able to sell the chips for $7500. That would mean AMD would have gross margins in excess of 50% in the sub-1000 pc class. With such profits AMD should easily reach $75 by OCT 98 when the above becomes clear, and all the Analysts jump over each other to upgrade AMD Stockman

To: Petz who wrote (29382)	3/4/1998 2:14:00 PM
From: Aaron Cooperband	Read Replies (2) \| Respond to of 1574002

John - Re: "It requires a lot less of AMD's cash to pay IBM $2000 to $2500 per wafer for K6 CPU's than it does to purchase additional lines of capital equipment for Fab 25." AMD is selling a low margin product and must pay for double depreciation and SG&A expenses, as well as for IBM's profit margin. On top of this, they don't control their sales prices, their competitor does. Step back from the numbers for a moment and use your common sense. If you think they can make money in this situation, I think you're dreaming. Aaron