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: Tenchusatsu who wrote (40324)	10/29/1998 1:53:00 PM
From: kash johal	Respond to of 1573432

Tench, >Re: Isn't this worst-case scenario for Intel a little far-fetched? For this >to happen, Dresden will have to ramp to full capacity earlier than >humanly possible, there has to be no growth in the CPU market in >1999, and Intel has to fail big time with Cascades and Coppermine. >Let's face it, AMD's success depends on reading Intel's own >roadmaps and aiming for the holes. Once again, AMD can do it if >they can rely on their crack team of engineers to perform. But if AMD >wants to take the leadership reigns away from Intel, they will lose. Tench they can get to 10M/qtr with some outside foundry sourcing. AMD had a deal with IBM and then that was nixed in favor of MOT. MOT has a big empty fab. and I am sure that they would like to fill it. Allegedly the 0.18 process and Cu process will be identical between MOT and AMD so switching to external fab is simpler. This was the "virtual gorilla" that Jerry alluded to. The big issue will be demand NOT capacity at AMD IMHO for next year. On CPU growth for next year there is a wide divergence of viewpoints. Some folks think ala HP that there will be a tech slowdown in PC market. Other folks think that the yr2K problem will accelerate PC replacement at businessess. It is NOT INCONCIEVABLE that AMD RAMPS to 30-40% of overall CPU market next year. This would mean unit growth decline and ASP and margin decline at Intel. You have seen how the market reacts to that kind of scenario to tech stocks this year many of whom are off 50%+ from their highs (still). My view is that either AMD will win and win big next year or they will lose and lose big. I don't see the status quo holding where they have 20% market share. Regards, Kash

To: Tenchusatsu who wrote (40324)	10/30/1998 1:54:00 AM
From: RDM	Read Replies (2) \| Respond to of 1573432

I expect AMD to 5 to 10 Million CPUs per quarter next year at an ASP of $150 or higher. Currently Intel is attempting to freeze AMD out of the market by price bombing the low performance end of the market. AMD should close the gap on Intel's current speed advantage making it more difficult to price bomb the low end without hurting their own revenue. Many analysts are expecting a significant increase in CPU consumption next year due to Y2K. If AMD ships 7M 600 Mhz K6-3 during Q4 99 at $150 they will be doing $1.35B in sales, making $1.50 per share profit and stock selling at $120 per share (20 times earnings). The PC market could be at 30 M per quarter CPU rate meaning that AMD still "ownly has 23% share". AMD does not need to kill Intel to win big. Current CPU chips drop to $90 quickly because they only cost $30 to build. Future chips such as K6-3 will not drop as quickly because they will cost more ($70 ?) to build due to the large area used by cache. Using .18 will eventually drive the cost down. I believe AMD stock price is more likely to go up in the short term with Intel than to prosper from Intel failures. If Intel fall Wall Street will say that the PC market is tanking before the would credit AMD.