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.

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

To: Petz who wrote (31813)	4/14/1998 3:19:00 AM
From: Profits	Respond to of 1578539

John, re: "Profits, I take the UMC foundry deal for FPGA's as a good sign. If AMD's FAB-25 production yields for the K6 didn't live up to the levels of their rocket-lot yields, they might have farmed off production to IBM, freeing up some Fab space for making the FPGA parts. But since the yields are so good, they're keeping FAB-25 strictly for CPU's, since yield really matters for profits, and using UMC for smaller die size FPGA parts, where yield is not as important." I agree that the UMC foundry deal is a very good sign for AMD. AMD is still focusing 100% of it's FAB 25 capacity on higher margin processor business. Yields have been dramatically enhanced and they should start to see some significant revenue improvements. I look at the previous losses that AMD sustained as necessary evils to be in the position they're now in. Besides, a $55M loss last quarter is really insignificant compared to their most profitable quarters. They were hitting ~ $200M in profit per quarter when the 386 and 486 were at their peaks. I expect AMD's profits to be even larger when the K6 (0.25u) and K6-3D are cranking out in the 2H98. With respect to the UMC foundry deal, it puts AMD one step closer to selling off Vantis to raise some much needed capital. I suspect that AMD will be announcing the sale of Vantis within the next 3 months. That could raise ~ $500M - $700M in cash. Profits