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

To: RDM who wrote (54451)	4/6/1999 2:08:00 PM
From: Shane Geary	Read Replies (1) \| Respond to of 1583365

Advanced Micro Devices to Combine Austin, Texas, Factory Operations Date: Tuesday, April 6, 1999 Source: Austin American-Statesman, Texas Advanced Micro Devices Inc. is consolidating two of its older Austin chip factories into a single operation to cut costs and reduce its manufacturing capacity in areas where demand is shrinking. "The purpose is to create one fab with a solid economic and technical base," said spokeswoman Gail Webb. "There is insufficient demand for products to sustain two fabs." The company declined to say how many jobs will be cut in the consolidation, which will be completed by the end of the year. An industry analyst speculated the move would eliminate 200 or more jobs. AMD expects that most of the affected workers will find jobs in the consolidated factory or fill job openings in Fab 25, the newest of the company's chip factories in Austin. About 2,300 of 4,100 AMD's Austin employees work in the chip factories, where the company makes most of its chips. The company disclosed the consolidation this week in a document filed with the Securities and Exchange Commission. AMD has been under pressure to cut costs to improve earnings. The chip maker, based in Sunnyvale, Calif., lost $104 million, or 72 cents a share, on revenue of $2.54 billion in 1998. It has warned that it will also report a loss for the first quarter that ended March 31. Although the company has gained substantial market share with its K6 family of processors, rival Intel Corp. has cut processor prices, sabotaging AMD's earnings. Analysts said the fab consolidation is in keeping with AMD's efforts to concentrate its efforts on microprocessors, the brain chips of personal computers, and non-volatile memory chips, used in cellular phones and computer networking equipment. The memory chips are made in two Japanese factories that the company jointly owns with Fujitsu Ltd. The consolidated factories make chips used in telecommunications and computer networking equipment and other products. The company's K6 processor family is made in Austin's Fab 25. A new factory nearing completion in Dresden, Germany, is expected to begin volume production in 2000 on advanced microprocessors, which are "brain chips" for computers. AMD is counting on the new chip, the K7, to make it more competitive with Intel. "They need to hit a home run with the K7," said analyst Mark Edelstone with Morgan Stanley Dean Witter in San Francisco. The consolidated factories, Fabs 14 and 15, were built in the mid-1980s and make products three to four generations behind the leading edge of semiconductor manufacturing technology. Chip makers have accelerated the shutdowns of older factories for two reasons. One is that those chip are quickly losing their profitability. The other is that better chip-making technology in newer fabs is making the older chips obsolete faster. "A lot of older fabs have been shut down worldwide in the past few years," said Fred Zeiber, president of Pathfinder Research in San Jose, Calif. "The products have moved on to new (manufacturing) technologies. There is less product being made in the older fabs with the older technologies." Older factories generally have less advanced air filtration systems and less advanced equipment. As a result, the chips produced in the older fabs tend to be lower in complexity and performance than are semiconductors made in modern factories. The factories generally operate 24 hours a day, seven days a week to get the most productivity out of the expensive manufacturing equipment.

To: RDM who wrote (54451)	4/6/1999 2:14:00 PM
From: Tenchusatsu	Respond to of 1583365

<The stock may go down some next week when the details for the last quarter come out. That is what everyone on this thread has been saying.> Personally I'm waiting for the gory details to be released and the stock price has a chance to tank a little (if there's still room to tank) before I jump in again. <I am a long term holder of AMD because I believe the K7 will surpass Intel in speed. Once the production levels are up the profits in my opinion will flow.> Obviously you must have some insight into the long-term plans of AMD, because I've heard of none beyond their 1 GHz goal for the K7. Tenchusatsu