Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Frank DiLorenzo who wrote (52314)	4/7/1998 1:59:00 PM
From: Home-Run	Read Replies (1) \| Respond to of 186894

Finally some +ve news for this dog: uesday April 7, 1:29 pm Eastern Time IBM does not need to invest in AMD-analyst SAN FRANCISCO, April 7 (Reuters) - International Business Machines Corp. does not need to invest in Advanced Micro Devices Inc. (AMD - news) and should not make an investment in the chip maker, BancAmerica Robertson Stephens analyst Bret Rekas said. ''IBM doesn't need AMD. AMD doesn't offer IBM anything,'' Rekas said. ''Will IBM do it? They can; I don't think they necessarily should.'' Rekas's comments, in which he reiterated a market perform rating on IBM, come amid a slew of rumors in the past week that the computer giant would invest in a stake in AMD, the cash-strapped maker of Intel Corp. (INTC - news) clone chips. The two companies have declined to comment on the rumors, which started last week, after some analysts said that IBM may acquire an estimated 25 percent stake in AMD, based in Sunnyvale, Calif. IBM already has signed a pact to manufacture processors for AMD, which has been having problems in getting its K6 chips to volume production. AMD, which will release its first quarter earnings after the stock market closes Tuesday, is expected to update Wall Street on its manufacturing status. Analysts have also said in the past week that AMD's yield problems have been solved and that it is now producing its K6 processors at higher speeds in volume. Monday, Ashok Kumar, an analyst at Piper Jaffray, said that he believes IBM will make an investment in AMD, bailing the company out of its current cash crunch in the form of a ''Medici,'' referring to the Italian banker of the Renaissance. ''I get the sense that this is not going to happen, but then what constitutes an investment?'' said Rekas, adding that IBM could announce some sort of manufacturing exchange. ''IBM says, hey, we will give you X in exchange for a deal -- for every million chips we produce for you, we will get one million chips,'' Rekas cited as an example. IBM has been using AMD's K6 chip in some of its sub-$1,000 PCs. That market sector is fast-growing but much less profitable than higher-priced PCs. ''We believe IBM isn't interested in trying to challenge Intel's de-facto PC microprocessor monopoly,'' Rekas said. ''That war has been waged and won by Intel...Although IBM has used limited volumes of alternative X86 processors in its consumer-oriented Aptiva line, the majority of IBM PC Company's shipments have and, by our analysis, will, continue to utilize Intel microprocessors.'' Shares of AMD were down 1-7/16 to 29. IBM was down 1-7/16 to 104-09/16.