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

To: Tenchusatsu who wrote (40294)	10/29/1998 12:39:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1573227

Tench, >Re: Does AMD have a sound long-term strategy? >Never mind the gains made from getting 3D-Now out to market first, >or how great the K7 looks on paper. Never mind how AMD took >advantage of Intel's lateness in the emerging sub-$1000 retail >market. And never mind the debates over process technologies, die >sizes, margins, fixed costs, 3D-Now, etc. These are all very frivolous >questions in the light of this fact: The CPU market changes very >quickly. And AMD's plans beyond the K7 are a big blur, while Intel is >staying on track with their plans for Merced, Willamette, Foster, and >beyond (if you exclude the big Merced delay, which screwed the >whole company up but seems to be the exception rather than the >rule.) >Remember, just as quickly as AMD gained market share, AMD can >just as quickly lose it again. That's why investors aren't convinced >until AMD shows them the money. And even after all the gains and >design wins that AMD has, the market still isn't going to be >convinced by Jerry's promises until AMD can establish a foundation >of quality, high volumes (i.e. much more than 3 to 5 million per >quarter), and good reputation. A few cornerstones here and there >does not a foundation make. >I know that these are challenging questions, so feel free to flame me >for being biased. But remember, AMD's the underdog, so guess >where the burden of proof lies. I thought your post is very very good and you raise excellent questions. Your point about this being an extremely volatile market is right on. AMD IMHO will have an excellent Q4 and blow away the numbers. And the stock should see $25-30 this quarter. My cost basis is $17 and change and I plan on taking some profits in that range. Then the big question is Q1/Q2 next year. Seasonal demand will decrease and AMD is still ramping up it's volumes to the 6-7M/qtr level. If AMD gets the speed grades to 450-500 Mhz then they will have no problem shipping the 6-7M pcs/qtr volumes and Intel will get hurt hard. If they can't meet the speed grades then Intel will have 450/500Mhz Katmai and 450 PII 's and they can ramp celerons up to 400-450 and attempt to kill off AMD. AMD also has their deal with MOT and they have been very quiet about their 0.18 plans. I can see AMD stock price at $15-20 again by mid next year if they have not executed or I can see it at $50-60 if they execute well and the K-7 comes out on schedule as advertised in volume. I see Intel possible getting to $100-110 if AMD stumbles and the downside of $20-40 if AMD gets up to 10M CPU's/qtr by end of next year with Dresden and MOT. Intels profits will vanish if they have to run factories at 60% capacity, just like any other semiconductor companies. The key thing in high tech is NOT to fall in love with ANY stock, diversify, and try to do some analysis. The only thing we know is that things will change in this biz. Regards, Kash