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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (5225)	4/28/1998 4:41:00 PM
From: Mason Barge	Respond to of 10921

It is hard to say what would happen to AMD if, as seems likely, it starts bleeding money in a couple of quarters. On the plus side, it will have two huge new fabs online, one in Austin and one in Germany, just filled with hideously expensive equipment and cranking out K6 chips. It is hard to see how someone could resist buying and operating such an enormous capital investment (assuming AMD can get the Dresden fab off the ground -- they certainly haven't shown much ability in the area with their Texas operation.) On the other hand, if AMD is losing money, you are going to have a considerable oversupply of MPU capacity and falling prices. If it should get as bad as the DRAM situation, to the point where the plants are operating at a loss to supplies and direct costs, they would have to be shut down and either mothballed or salvaged (to the degree that the equipment can be reconfigured). It may well be that the German government would assert a lienholder interest in the amount of prepaid tax credits for the Dresden plant. I don't know. It just looks ugly, that's enough to keep me away.