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Technology Stocks : AMD: A thread for real AMD investors not nit-picking twits -- Ignore unavailable to you. Want to Upgrade?

To: nihil who wrote (11)	11/7/1998 9:09:00 AM
From: Brian Hutcheson	Respond to of 254

Nihil , that is the kind of constructive comment that is of benefit However I believe that you have left a few important pieces out of your assessment . 1. AMD has been in this business a long time and even though has lagged Intel in design was able to make a very good profit in '92-'93 2. Having a large amount of assets does not automatically translate into the best products e.g. IBM and Motorola's attempt to break into the cpu market with the Power PC . 3. AMD now has the best CPU design team. 4. AMD has gained the retail market share that it set out to obtain. 5. AMD's production increase was excellent last quarter and will continue . 6. The new products K6-2 400 and notebook will along with greater volume produce excellent profits IMO . 7. The K6-3 and K7 will start to show AMD's design superiority and increase that profitability next year .(again IMHO). 8. AMD products are the best sellers in retail , showing that Intel's marketing clout is not as great a factor as believed 9 Last but NOT least the PC industry (with the exception of Dell) does not appreciate having Intel in a monopoly position and will support AMD products . In conclusion AMD has $680 M in cash is profitable as of Q3 , has FAB 25 ramping up at a very fast rate with FAB 30 ready to roll very soon and also has the product K7 to produce . Brian

To: nihil who wrote (11)	11/7/1998 12:14:00 PM
From: RDM	Respond to of 254

You make a eloquent position statement. However, your conclusions could have been equally applied to General Motors vs Ford. General Motors got the upper hand in size, income, profits, etc. However, they did not annihilate Ford. Both grew bigger, both had long term erosion of margins. There is a rightfully position for #1 in a market, and also a position for #2. Companies such as General Motors, Boeing, Xerox, and IBM are interesting examples which scholar will argue the similarities and difference with the semiconductor CPU business. As a second point, I would argue that the K7 is not a shot at the heart of Intel, but rather a necessary evolutionary moderate cost workstation chip of the future. In five years when 1 GHz is the mantra of modern computers, the performance of the K6-2 or K6-3 will simply not be enough for the low end and moderate computer users since these earlier chips likely will "peak out below 700 Mhz" and these speeds will seem unacceptibly slow just as the Intel 80486, 80386, 80286 and 8080 generations of yesterdays gone by As a third point, Intel is now valued by the market at $90+ per share. An all out price war with AMD would reduce their ASP by more than 2.5x and this would likely, IMHO, result in an Intel stock drop and revenue drop by more than this factor. As may people have observed the Intel revenue per share is in the low teens presently and therefore the revenue per share could drop to $5 per share or lower in an all out price war. Distressed companies sell for less than their revenue per share. A price war with AMD and the subsequent revenue and profit hits could result in a market evaluation similar to other economically shrinking companies which would temper Intel executives decisions as it has other earlier executive in General Motors, IBM, etc.