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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Charlie Tuna who wrote (7737)	4/6/1998 7:54:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 11555

Yes, I've been reading various news articles and posts about AMD's recent yield gains. Some reports have it that AMD has yielded as much as 100% yields on some K6 wafers at 0.25. "Typical" yields are around said to be around 80%. It doesn't get much better than that. That should quickly equate to AMD's ability to produce 4-8 times as many parts as were produced with at the sub 40% yields rate at 0.35 um. Ashok also said that he has confirmed IBM's intent to invest around 1/2 billion $ into AMD. Things are certainly looking up for AMD. Another CRN article points out the products aimed at the WIN CE and a new sub-notebook form factor product category being pushed by MS. This runs up against Intel's bloated strategy and is likely to cause them more pain. crn.com I tried to find an e-article counterpart for one that was in the latest paper issue of CRN but came up empty. CRN did a Gallup poll of around 1000 business buyers and managers to determine their plans and reasons for buying. What was interesting about the article was that it confirmed the discusssions we have had on this thread over the past few months (how can we get into the big buck consulting/market study racket? - three months latter research firms issue a report confirming our conclusions). Respondents said that for business desktop systems they valued reliability above all else, then total cost of ownership, ease of upgrade, service and support, system performance, and then initial cost, and brand recognition. The analysts and investors woke up from their Intel daydreams a bit today and pushed up AMD, NSM and IDTI while INTC fell a notch. The word is that Intel is going through a lot of internal turmoil and yet unofficial reorganization of priorities and management structure. The hornets nest has been knocked off the tree and they are buzzing around frantically trying to figure out what went wrong. Intel will see some hits to its position in the PC market through the next several quarters. This will include margin and market share declines in both desktop and portable PC markets. By the middle of next year the Merced effort should start to show some positive results. I haven't modeled how this will contribute to INTC's bottom line - it has the potential to be a huge product thrust but how much will they gain compared to market share and margin losses for PCs is not well understood. IDTI got into the uP race late but not too late. IDT will not have to suffer the hard knocks that Cyrix and AMD went through to get to cost effective and competitive designs and break open the Intel Inside dogma. It's still a matter of yields and production. Crank those parts out IDTI!

To: Charlie Tuna who wrote (7737)	4/6/1998 10:29:00 PM
From: Samuel R Orr	Read Replies (1) \| Respond to of 11555

That article was very interesting, Charlie. AMD rose $1 7/8 today to $30 7/16, which was a nice increase. Not six bucks, though. It would be an excellent way to pump the stock a bit, particularly since AMD is expected to report a significant loss tomorrow. The analysts' earnings estimates vary widely, but few of them expect the number to be positive. While IBM bears no great love for INTEL, and might adopt TI's old philosophy, "If you can't take the business, destroy it," I'm not sure IBM would want to invest half a billion bucks in AMD, either. Will the Justice Department permit it? Anyway, the rumor is certainly a fine way to sugarcoat bad news on AMD's performance. Somehow, I feel Jerry Sanders will leave AMD the same way TJ Rodgers is likely to leave Cypress: feet first in a pine box for TJ, and to a marble mausoleum for Jerry. Jerry is somewhat older though, and might want to spend more time enjoying the time he has left. The yield figures, according to the article you included, are approaching 50% for the K-6. Be a little careful with the paragraph that talked about nearly 100% yields to 266MHz. That, to me, signifies nearly all the good die run to that speed, not that all the die are good and reach that speed. Marketing guys are as clever with language as Bill Clinton, who never broke the laws of the country in which he smoked, but did not inhale, pot. You have to watch them. In reference to Rob's comment about .18 micron technology, it is one thing to demonstrate it and quite another to manufacture with it. National Semiconductor hasn't offered any DRAMs for almost two decades, and would need lots of help to include a large DRAM matrix in a system on a chip. All in all, it seems as though AMD is finally going to gain market share at Intel's expense. I do like the fact that IDTI is said to have a very efficient core microprocessor design, which should help them make money at the lowered margins that will ensue. These reduced margins will still be far better than those of SRAMs. One might wonder if INTEL will become so disturbed that it will again lodge legal action against AMD, as it has done in the past. I think IDTI will be happy with a few second tier accounts, hopefully selling every C6 it makes, with the C6+ to come. As prices on computers drop, people who would not otherwise have them will buy. Business should be good, and IDTI needs only a small fraction of it to do well. We'll have to see how it all shakes out. I want to end with the fact there really is a great deal of useful, accurate information that comes on this thread. Rob S supplies much of it, but others contribute, too. Not being a chartist, or TA as they prefer to be called, I'll leave that portion to the experts. However, the technology part interests me, and I enjoy reading all your comments. Good luck out there, and keep the information flowing.