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

To: Petz who wrote (46236)	1/15/1999 5:19:00 PM
From: kash johal	Read Replies (1) \| Respond to of 1573558

Petz, re: Celery costs etc. I think you are focussed too much on the Celery cost structure. I think it's incremental cost is in the $30-35 range for socket 370. Depreciation/R&D etc can be manouvered any number of ways. If you apportion it evenly across the CPU product lines then clearly total CPU costs are in $100 range as average ASP is $220+ with average CPU margins of 60% range. Intel can afford to sell these parts in $50-60 range all day long if they have to once the PIII comes out. With the PIII the average ASP's and margins at Intel will tend to go up (over equivalent PII) from last quarter so they even more of a cushion to slash the lower end prices. AMD's only hope is to establish a middle ground in the 400-450Mhz speed grade area for next 6 months. If they can average 400-450 speeds grades the margins and the stock will rocket again. Otherwise we are looking at dead money till the k7 is released at end of Q2. The good news is that they have pissed off the analysts so much that expectations are very low right now so there shouldn't be much more downside. I sold my CPQ calls today for a 100% profit and will back another truck up if they drop very much further ( I already have one truck full already). Regards, Kash J.