Home

News

Forums

Hardware

CPUs

Mainboards

Video

Guides

CPU Prices

Memory Prices

Shop



Sharky Extreme :


Latest News


- Acer Fires Up Two New Ferrari Notebooks
- Belkin Debuts Docking Station for ExpressCard-Equipped Notebooks
- Logitech 5.1 Speaker System Puts Your Ears At Eye Level
- Dell, Nvidia, and Intel Fire Up Overclockable Gaming Notebook
- Gateway Puts Premium Components Into Affordable Home Desktop
News Archives

Features

- SharkyExtreme.com: Interview with ATI's Terry Makedon
- SharkyExtreme.com: Interview with Seagate's Joni Clark
- Half-Life 2 Review
- DOOM 3 Review
- Unreal Tournament 2004 Review

Buyer's Guides

- September High-end Gaming PC Buyer's Guide
- September Value Gaming PC Buyer's Guide
- October Extreme Gaming PC Buyer's Guide

HARDWARE

  • CPUs


  • Motherboards

    - DFI LANPARTY UT nF4 Ultra-D Motherboard Review

  • Video Cards

    - Gigabyte GeForce 7600 GT 256MB Review
    - ASUS EN7900GT TOP 256MB Review
    - ASUS EN7600GT Silent 256MB Review
    - Biostar GeForce 7900 GT 256MB Review





  • SharkyForums.Com - Print: AMD as an investment

    AMD as an investment
    By anubis44 January 12, 2001, 03:54 PM

    <>

    You're absolutely right, Arcadian. Here's my original rant:

    Firstly, sorry for the rant, but it got my ire up when I read what you said, Chillingworth. Your subsequent, good-natured reply was much appreciated, and you showed that you are a bigger man than I had you pegged for. T@xman, I'm also a system builder, and I echo your sentiments, although I don't agree that the motherboards take away from the value you get when you go AMD. Remember that the Athlon/Duron chips have a 100MHz DDR FSB (200MHz) which requires more capacitors for stability. You can almost think of an Athlon/Duron motherboard as being like an Alpha processor motherboard, since it uses the EV6 Alpha bus thanks to many of the Athlon project's engineers being former DEC Alpha engineers. That's what has made the Athlon so formidable: top-notch engineering. These guys were probably pissed off at Intel for making them loose their jobs via the Compaq purchase of DEC a couple of years back that they decided to accept the generous AMD job offers and crank out Intel carnage in the form of a kick-ass 7th generation processor to rival anything Intel could produce. As opposed to 'reverse engineering', I like to think of it as 'revenge engineering' In any case, FaTs, I also completely agree with your sentiment on AMD chipsets. The 750 Irongate on my Asus K7M machine still rivals the performance and stability of my newer, subsequent Athlon Thunderbird's Abit KT7 and the EPoX 7KXA I bought for my second Athlon Classic system. That darn Asus boots like greased lightenting and is a complete pleasure to use (it's got one of the original Athlon Classic .25u 500MHz chips that actually had a 650MHz core, so it's running at 700MHz using a GFD). I suppose part of my greatest annoyance is seeing AMD's stock price sitting below $20/share, since I've got about 2900 shares myself. It just doesnt' make sense to me, since the products are great, the computer manufacturers have all significantly increased their Athlon/Duron product offerings, AMD's profits have been stellar, their execution has been flawless since mid-1999, and their stock is still trading at a P/E of about 6.8 (as of todays' close), when Intel's is still about 22.1. Surely, Intel cannot grow profits over 2001 as quickly as AMD can, as AMD is so much smaller to begin with, and is ripping into Intel's market share, in addition to AMD's incredible position in flash memory (all production for the next 2 years pre-sold with solid cancellation penalty-laden contracts). I'm keeping my AMD shares until this sucker hits $50-$60/share, and maybe higher. See you all online.

    -------------

    I'd like to add that I felt this was the best place to start this thread, since it is most directly related to CPU's of all the forums on here. If anyone doesn't want to see investment discussions on this forum, I'll understand, but I think that the economic health of AMD is relevant to it's business of making kick-ass chips for all of us.

    By YC January 12, 2001, 04:15 PM

    What are AMD stocks trading for right now? I can't see them doing anything but increasing market share in the near future so their stocks SHOULD keep rising, slowly but surely.

    By Arcadian January 12, 2001, 05:28 PM

    Investors are a tough crowd to please. I would be kidding myself if I claimed I knew what Wall Street was thinking, but I believe I have an idea why stock prices are looking dirtier than a public restroom in Ireland (remember Trainspotting, anyone)

    It wasn't long ago that technology stocks reigned supreem and the Nasdaq was sharing in their highest composit average, ever. Intel's high was $75, and AMD was previously at $48 1/2. Now Intel is at $32 1/8, a loss of 57.2%, while AMD is scraping by at 17 13/16, down 63.3%.

    P/E, or the price per earning ratio, is an ambiguous measurment that relates to the relative worth of a stock price. High P/E ratios mean a business that is likely to do well in the future, while low P/E ratios indicate a business on shaky grounds.

    The Nasdaq used to average almost 28 for P/E ratios, and now that number is well below 20. Intel itself has gone from a P/E of over 50, down to a current level of 18.9. However, Intel is not the only one that has dropped. Sun Microsystems used to have a P/E of over 120, and that has dropped to a current level of 49.1. Some .com companies shared a brief point of 1000+ for their P/E ratios. If they are still in business, I can guarentee that they are under 50 by now.

    Sure enough, the Nasdaq composit has plumetted from a high of over 5,000 points to a current level of 2,626. Last week, it actually scraped to 2,300. So sure enough, the burden is shared by many companies, but high technology companies seemed to have taken the brunt of the current bear market.

    A market being bearish tends to sell, while a market being bullish tends to buy. Selling tends to drop stock prices, while buying tends to raise stock prices. The last several years have been extremely bullish, so it is no surprise that the market is in a correction mode. I could babel all day about the mannerisms of the market, but let me change the discussion back to AMD. I simply wanted to illustrate that stock prices have dropped across the entire market... not just Intel and AMD.

    As for AMD, however, they are at a current P/E ratio of 6.9. This is actually much lower than one would expect from a technology company. In fact, this is currently below tobacco provider Philip Morris, which is 11.47. I realize the Philip Morris is into manty different businesses besides tobacco, and that is whaty is saving them from having an even lower P/E ratio. But since AMD is at 60% the level of Philip Morris, it does bode that Wall Street considers AMD to be quite a shaky company.

    In order to understand this, realize that AMD has traditionally been in debt more times than it has turned a profit. Ever since its opening on the stock market, AMD has never risen much higher than $40 (adjusted for a stock split earlier last year). It made its Initial Public Offering (IPO) at the end of the 1983 year at about $18. In November of 1999, they were still at $18. However, in May of last yeay, they sky rocketed up to the high price of $90 for the first time ever. However, this was to be short lived. After making a 2:1 stock split last August, they plunged down to their current stock price, and adjusted for their pre-split price, they are now at $35 5/8 ($17 13/16 * 2).

    So AMD dropped from almost $90 down to $35, but this is hardly abnormal, given that other tech stocks have befallen the same fate. So what makes AMD different? Well, as anubis44 was saying, why should AMD have a P/E ratio much smaller than Intel's, when it can easily grow percentage wise, much bigger and faster than Intel can. Well, let's consider if that's true.

    Both Intel and AMD have gotten themselves into many businesses. Not only is Intel into microprocessors, but they are also into flash, networking, Internet building blocks, Communications, Opto-electronics, and other new businesses. However, all together, these businesses are losing money. In their end of quarter report, Intel divides the business into the Intel Architecture Group, and Other. Other has posted a loss more times than it has posted a gain, but the Intel Architecture Group has posted bountiful gains every single quarter. Obviously, Intel is funding these Other businesses in hopes that some may spawn new revenue. But, since they do not break it down further, Wall Street is left guessing, and right now, they are punishing Intel along with all the other tech stocks. If, in the future, these businesses post gains, or even better, contribute to overall revenue, then stock prices will shoot up.

    AMD, on the other hand, has had fewer new businesses. They share a flash business with Fujitsu, and between both companies, it is bigger than Intel's. However, if AMD were to post more losses, Wall Street knows that AMD will have to sell their remaining flash business back to Fujitsu. In fact, they may do just that to fund their new Fab35 that has been in the news recently.

    AMD has also been selling off other portions of its business in order to turn losing quarters into small money makers. In Q3 last year, AMD sold Legarity, a communications sector that was small in revenue, but it made AMD turn a break-even quarter, into a small money making quarter, which satisfied Wall Street for a small amount of time.

    What Wall Street wants to see is AMD move their microprocessor line into other markets. For both Intel and AMD, the microprocessor departments are the biggest money makers. However, while Intel has made their way into many segments, AMD has only concentrated on Home PCs.

    Wall Street estimates that the Home PC market will exibit smaller growth rates due to most Americans already having computers that satisfy their needs. Where both Intel and AMD need to investigate is other PC markets such as APAC, the Asian Pacific market.

    Besides that, Wall Street expects AMD to move into other Microprocessor markets. AMD used to have a decent market share in mobile computing, but since the arrival of Transmetta, and Intel with their Speed Step technology, AMD has lost almost all of it. Now, in order for their stock to increase, they need to get back in.

    Not only that, but Intel has their fingers in the world of business PCs, which take about 60% of the total PC market. AMD would be very successful if they can sell processors in this segment. Not only that, but the server and workstation markets are both rated for very high growth potentials over the next few years, but Intel has a much larger market share in this segment as well. Also, the embedded market gives plenty of business to Intel, while AMD does not have any of their current lines in that business.

    To investors, Intel seems to be the company with their hands on the most new markets, and as such, they get rewarded with the higher P/E ratio. If AMD is able to show Wall Street that they can gain market share in segments other than the Home PC market, which is already considered a low growth area, then they will be able to rebound with the rest of the Nasdaq.

    However, one thing that will inhibit AMD from reaching these markets is their production capabilities. With the limited volumes that AMD can produce from their two factories, they would have to decrease one market share in order to build up another.

    AMD owns only two fabs: Fab25 in Austin, Texas, and Fab30 in Dresden, Germany. These two fabs together enabled AMD to produce 7 million microprocessors in Q3 2000. AMD expects to make 40 million over all of 2001, or roughly an average of 10 million per quarter. Intel, on the other hand, gives a conservative estimate of 140 million for 2001, and more fabs are being brought online over the next couple years. Even if AMD gets Fab35 off the ground, they don't expect that to get running until 2004. Intel plans to have 7 fabs running their new 130nm process by the end of 2002, and other, older fabs will be upgraded to todays current 180nm process. Volume wise, AMD cannot compete.

    Also, Intel has the luxury of brand name recognition, that has so far allowed Intel to have an Average Selling Price (ASP) of twice that or more of AMD. By selling many more processors, at more than twice the price, average, Intel still has a lot ahead of them in terms of revenue. Wall street recognises that by giving them a larger stock price.

    Although this has been another Arcadian(R) Long Winded(tm) Conversation, I hope you enjoyed it, and I welcome any feedback. Hope this answers your question.

    By iamsostupid January 12, 2001, 06:57 PM

    extremely long post, but correct regardless. nice job. If you guys haven't noticed though, EVERYONE is doing bad right now. You can still see [in some stocks] some form of a parabolic improvement in the charts, because most stocks are struggling to climb up. The only people I know of and own that have turned around and going up again are Applied Materials, and Oracle. Everyone is in the pooper right now, so now isn't a good time to talk about Intel vs AMD: Battleground, Wall Street.

    By CajnDave January 12, 2001, 08:59 PM

    quote:Originally posted by iamsostupid:
    The only people I know of and own that have turned around and going up again are Applied Materials, and Oracle. Everyone is in the pooper right now, so now isn't a good time to talk about Intel vs AMD: Battleground, Wall Street.

    The energy sector is doing good also.

    By MetalSlug January 12, 2001, 11:45 PM

    Now is the perfect time to discuss. My dad is the biggest pessimist(sp?) and never bought stocks over the past couple of years(although he has owned oracle,sun,microsoft,hp since early 90's). He cashed out a year ago, paid off his capital gains, and is reloading on the bargains to be had right now. If there is one thing that he beats into my head "Buy Low, Sell High, Never Look Back".

    All I am saying is that it took awhile for me to convince my dad on Nvidia when it was undervalued for around 6 months 2 years ago, but he eventually bought in . This was when 3dfx was the darling of Wall St. even though all us hardcore knew it was Nvidia tearing up 3dfx, consistently conducting solid business, and piling up the big contracts. Wall St. takes a long time to catch on . . .

    Now Listening to Capone n Noreaga -- Bloody Money

    By Fuzzball January 13, 2001, 01:28 AM

    Whoa, Arcadian, that's a lot of info. Not in vain though. You've shed a lot of light on to the stock market. Thanks for the informative post.
    You mentioned Fab35. I haven't poked my nose in the news lately, but where will that be located and what kind of product will it be pumping?

    By anubis44 January 13, 2001, 05:07 AM

    Hey, Arcadian, here's a link to an article about one of AMD's latest server design wins. This one's about Sun's new Cobalt server:
    http://www.ebns.com/story/OEG20010112S0082

    I think AMD is going to start chewing large chunks out of Intel's server market shortly. Many companies only require smaller, 1 processor servers for things like their market presence website. Once AMD releases their multiprocessor chipsets and processors, watch the sparks fly. I'm going to believe in AMD again (I made money on AMD last year in spades) and bet my hard earned dollars that they'll make a successful assault against the business machine market (look at Micron selling Athlons in their business computers) and the low to mid-end server markets.

    By the way, I do know a few things about the markets. My dad, brother, uncle, and two cousins are all stock brokers here in Toronto. I disagree with your assesments about Intel, although I do recognize that you were more explaining how Wall Street percieves AMD vs. Intel than how YOU percieve AMD vs. Intel. That's how you make money. When YOU know something that the general markets don't. I knew Intel was going to be in big trouble and that AMD was going to kick them in the pants back in November of 1998 when I first read the specs of the AMD Athlon processor. I guessed very right that time. Now, if only my market timing were just a little bit better, I'd make more money off of my 'correct' guesses!

    By Jd January 13, 2001, 06:45 AM

    Thanks Arcadian! good enough to put in the Wall Street Journal.
    I would agree that the future of AMD is shaky, just like there past. It will be a challeng for them to keep up with Intel, but they've already turned alot of heads, GO AMD!!!

    By Arcadian January 13, 2001, 10:57 AM

    quote:Originally posted by Fuzzball:
    Whoa, Arcadian, that's a lot of info. Not in vain though. You've shed a lot of light on to the stock market. Thanks for the informative post.
    You mentioned Fab35. I haven't poked my nose in the news lately, but where will that be located and what kind of product will it be pumping?

    Thanks so much for the complement, Fuzzball. I think the topic has been long overdue, so I also thank anubis44 for posting the first message.

    As for Fab35, it has recently been a news topic. AMD owns plenty of land in Dresden, near Fab30, so I believe that will be the best place for Fab35. Also, 2004, the planned opening of the fab, nearly coincides with the release of a 100nm manufacturing process (also known as .10u). I believe AMD would be silly not to fit the fab with this technology. Lastly, I expect the fab to use an SOI (Silicon on Insulator) process, which will help reduce heat, and increase megahertz for a given processor. AMD plans to implement SOI in Fab30 in 2002, so I would assume that Fab35 will also have it. Hope this answers you question.

    By Arcadian January 13, 2001, 11:19 AM

    Thanks again for the topic, anubis44. This has already turned out to be quite an interesting discussion. I wanted to respond to your most recent post.

    quote:Originally posted by anubis44:
    Hey, Arcadian, here's a link to an article about one of AMD's latest server design wins. This one's about Sun's new Cobalt server:
    http://www.ebns.com/story/OEG20010112S0082

    This certainly looks promising for AMD. Sun's UltraSparc is simply too exspensive to fit into the low end server market, especially with Server Appliances, so I can see Sun wishing to use a processor from a different vendor. However, this is a deflection from their vertical business model, which means that they offer a package that's 100% Sun.

    However, I am betting that competition from Intel in Sun's high end server space is what is causing them to change their model. Going with an Intel competitor would be likely. But, the article does point out that relations with AMD are still not confirmed, and there are plenty other RISC manufacturers that would fit into a low end server appliance.

    This could be a good win for AMD, though, but right now, it's a little early to comment.

    quote:Originally posted by anubis44:
    I think AMD is going to start chewing large chunks out of Intel's server market shortly. Many companies only require smaller, 1 processor servers for things like their market presence website. Once AMD releases their multiprocessor chipsets and processors, watch the sparks fly. I'm going to believe in AMD again (I made money on AMD last year in spades) and bet my hard earned dollars that they'll make a successful assault against the business machine market (look at Micron selling Athlons in their business computers) and the low to mid-end server markets.

    Large chunks? Hardly. But, I do believe that AMD desires a bite at a time out of Intel's server market share. AMD uniprocessor solutions do make a lot of sense compared to an expensive Intel platform, but dual processor stations tend to flatten out the difference in price between processor vendors (after all, there's not much of a difference between a $3000 computer and a $2600 computer, to a business), and Intel should win out because of experience and brand name recognition. Also, the Athlon will not likely tear into Pentium III Xeon space, since those products are primarily for dual processing or higher.

    I believe that AMD plans on offering dual processing stations for the price of single processor Intel based business PCs, and in that respect, they will get design wins. Businesses should be interested in that sort of product. However, AMD has not yet released performance evaluations for their dual processor systems, and I know of some design sacrifices that AMD had to forego in order to make their 760MP chipset, and those could affect performance a lot.

    We'll have to see how successful AMD is in stealing market share from this segment. Right now, I see a worst case scenario of decent penetration, but unfortunately I see a best case scenario of only decent penetration. Maybe that will change over the next year or two.

    quote:Originally posted by anubis44:
    By the way, I do know a few things about the markets. My dad, brother, uncle, and two cousins are all stock brokers here in Toronto. I disagree with your assesments about Intel, although I do recognize that you were more explaining how Wall Street percieves AMD vs. Intel than how YOU percieve AMD vs. Intel. That's how you make money. When YOU know something that the general markets don't. I knew Intel was going to be in big trouble and that AMD was going to kick them in the pants back in November of 1998 when I first read the specs of the AMD Athlon processor. I guessed very right that time. Now, if only my market timing were just a little bit better, I'd make more money off of my 'correct' guesses!

    That is a lot of credentials for you. I see now why you were interested in this topic.

    You are correct that in my last post, I was mostly offering Wall Street's perspective, but I also believe that there is truth in that approach. Intel does have a lot of market share, and the manufacturing to keep it. They have assets as well in case they need to act fast to prevent serious market loss. They also have a good amount of products on the horizon that I believe Intel can make good use out of.

    AMD is in the same optimistic position, but they do not have the manufacturing, or the assets to go to all out war with Intel. Their best position is to take a little at a time through good quality products, and good business practices. If they go too fast, they may start a war that they would lose in the long run.

    I like AMD as well, but I recognise that they have a tough road ahead of them. But I'll keep up with the news, so that I can be in the forefront to know how things develop.

    Again, if you have any feedback or comments, feel free to respond.

    By anubis44 January 13, 2001, 05:46 PM

    [QUOTE]Originally posted by Arcadian:
    [B]Thanks again for the topic, anubis44. This has already turned out to be quite an interesting discussion.

    Thanks arcadian, I'm glad you like the topic.


    <>

    I'm going to argue devil's advocate position here, despite my respect for your obvious intelligence and reasoning powers, and take the pro-AMD position. Firstly, there is no market with customers who are less loyal than the computer business. It makes one's head spin to see how fast, for example, Apple has adopted NVidia graphics chips after years of ATI loyalty, or how nine of the top ten tier 1 manufacturers of computers jumped from the good ship Intel, and started selling AMD chips as well. In many instances, this was brought about because of the benefits of 2nd sourcing due to shortages, as in the period from about November of 1999 to the end of the summer of 2000. In many other cases, these companies simply recognized the superiority of the AMD Athlon over the Pentium III and decided to sell the chips that people were asking for. A third and probably more compelling reason than the others was simply the cheaper prices of AMD chips.

    As far as your point about Intel having the assets or money to keep their market share, I'm afraid that argument doesn't wash either. Few companies have as much cash on hand as Intel, and few companies are in a position to run through those enormous cash reserves with alarming speed. Intel is building 3 more Fabs to add to the 9 they've got already. (If my numbers aren't perfectly right, they're very close). Those 3 fabs, as we know from the AMD articles mentioning the 3rd Fab AMD is rumoured to be contemplating, cost anywhere from 1 to 4 (in the case of a 12-inch wafer Fab) billion dollars. In addition, Intel is saddled with the high costs of having to update those other 9 existing Fabs to make modern .18u or smaller processes. But no matter how much money Intel has, they cannot buy time. In the article 'A Titan Falls - AMD Plays David to Intel's Goliath', Van Smith explains why Intel has ALREADY lost the war with AMD and why, even with their seemingly stupifying wealth, they cannot possibly rectify the serious miscalculation they made concerning AMD:

    http://www4.tomshardware.com/column/00q1/000209/index.html

    The PentiumIV is a 'broken' chip design, and I'll re-publish the link to this article for any that might have missed it previously and want to read a very technical explanation from a programmer's perspective to find out why the PIV is crappy:

    http://www.emulators.com/pentium4.htm

    The engineers are what matter. Money buys you marketing, but eventually even the stupidest or most stubborn people will eventually realize that what used to be so is no longer. Intel does NOT stand for unequivical quality and performance. Instead, it stands for rushed products which don't measure up to the original specs (Pentium IV), missed release schedules (Itanium, Pentium IV), and botched products (i820 chipset, Pentium III 1.13GHz)

    <>

    Yes, it's true. They DO make microscopes for children. That should tie them over for a while

    <>

    If more and more people want to buy AMD chips, the earnings from these chips, which are keeping AMD's Fabs at full-capacity, will fund new Fabs. The main thing is for AMD's engineers to be given the tools and facilities required to create the next generation of products.

    <>

    Yes, I agree that AMD cannot supply the whole computer market right now. They would be capacity constrained. This is not as big a problem as being demand constrained. I am optimistic that customers who have had the distinct pleasure of dealing with Intel throughout the last 30 years or so will be more than overjoyed to be able to thumb their noses at Intel and give them the finger, since they can now buy better, cheaper AMD Athlons and Durons. The kind of animosity that can build up over many years of dealing with a monopoly can be quite nasty when the monopoly ends.

    <>

    Agreed. AMD has a tough road ahead of them. The underdog always does. But I'm betting greenbacks this underdog DOES succeed and that this David will slay Goliath.

    cheers. I'm looking forward to the inevitable rebuttals.

    By winky January 13, 2001, 11:58 PM

    This is a long winded post. It is a good one though. Overall, I think AMD is going to keep growing, and in about two to eight years will be equal if not better to Intel in every market. They are slowly starting out, and have finaly gotten some where. There only problem is that when they are finally starting to excel, the market hits high hell, and all tech stocks have sufford including them. They will rebound like most the rest, so I think the are a good investment that is leading to a good future.

    By Arcadian January 14, 2001, 05:19 PM

    anubis44,

    That was yet another great response. You made some very insightful conclusions, but just watch out for authors like Van Smith who is more of wishful thinking than anything factual (he has been wrong many times before ).

    Also, keep in mind that AMD's road to success is a slope that gets steeper and more slippery the higher they climb. Changing business models to compensate for a growing business is more difficult when there are serious competetive pressures, and they can surely not overwhelm Intel at their current size.

    AMD may become a stronger force in the future, but I don't see this happening in the near future. There is simply too many markets that Intel is already deep routed in to get immediate results, and as you already know, they are capacity constrained right now in a big way.

    David vs Goliath may be a Romantic way to visualize AMD's struggle, but the real life position isn't as dramatic. Truly, as things stand right now, AMD against Intel is a toothpick attacking a tank. If later on that toothpick becomes a tree trunk equipped with armor piercing missiles, then maybe they'll stand a chance, but AMD's growth right now is severely limited, since they do not have the manufacturing to grow too large, percentage wise. The plans for Fab35 are still up in the air, and even if they are to succeed, the earliest they will be able to take advantage of it will be 2004.

    So essentially, AMD's growth will not happen overnight, even if they do have superior product. Also keep in mind that as AMD has made a few successes in their product lines, Intel will not be without theirs. Even in best case scenarios, AMD's struggle will be difficult, and it isn't likely to be the best case.

    I just wanted to mention these, because obviously you have both a financial stake in their company, and you happen to respect them. They are a good company, but so is Intel. Maybe it won't be that ay forever, but for the near future, it probably won't change that much.

    PS... also, check out the topic in the Highly Technical Forum titled "Pentium 4 article" and "Early Itanium Info". You may find those interesting, and I have had a lot to say about them.

    By anubis44 January 15, 2001, 05:27 AM

    <<...check out the topic in the Highly Technical Forum titled "Pentium 4 article" and "Early Itanium Info". You may find those interesting, and I have had a lot to say about them.>>

    I'll certainly read them over, Arcadian, as soon as I have the chance. Thanks for the info.

    <>

    Hmmm. I'd say the struggle is more like a ninja(AMD) vs. a teutonic knight(Intel) on a water slide. The advantage might NORMALLY go to the heavily armoured knight in a straight-out fight, but the uncertain market conditions look as though they might favour the more flexible, lean and nimble contender.

    <<...AMD's growth right now is severely limited, since they do not have the manufacturing to grow too large, percentage wise.>>

    Don't forget that Fab 30 in Dresden isn't like one of Intel's piddly older fabs, it is what's called a 'mega-Fab'. This factory has about 4 times the theoretical capacity of a single Intel Fab when running at 100% capacity. AMD was actually only utilizing 50% of Fab 30's capacity as of December 2000. If/when the other 50% of Fab 30 comes online (perhaps it already is!), AMD will have enough capacity (along with Fab 25) to supply almost 50% of the processor market world wide. That doesn't sound like a SERIOUS constraint to me, albeit it is a constraint insofar as AMD will not be able to supply ALL of the world demand without another megafab.

    Keep up the rebuttals. If I'm wrong, I certainly want to know about it!

    By Arcadian January 15, 2001, 01:51 PM

    quote:Originally posted by anubis44:
    Don't forget that Fab 30 in Dresden isn't like one of Intel's piddly older fabs, it is what's called a 'mega-Fab'. This factory has about 4 times the theoretical capacity of a single Intel Fab when running at 100% capacity. AMD was actually only utilizing 50% of Fab 30's capacity as of December 2000. If/when the other 50% of Fab 30 comes online (perhaps it already is!), AMD will have enough capacity (along with Fab 25) to supply almost 50% of the processor market world wide. That doesn't sound like a SERIOUS constraint to me, albeit it is a constraint insofar as AMD will not be able to supply ALL of the world demand without another megafab.

    Fab30 is not nearly the "Mega-Fab" you think it is. Intel has 6 fabrication plants running their P858 .18u process (Intel's other fabs do .25u or older processes). These fabs are also not 100% at capacity (though I do not know more specifically what percentage they were at). These 6 plants produced 35,000,000 processors in Q3 2000.

    AMD has two fabs on .18u, Fab25 and Fab30. Fab25 is actually larger than Fab30. I believe Fab25 was at 80%+ capacity, and Fab30 was at 50%+, as of Q3 2000. Between those two fabs, AMD produced 7,000,000 processors, or roughly 1/7th what Intel produced.

    Intel, therefore, has 3 times as many fabs, and produced 7 times as many processors. In 2001, Intel plans to produce 160,000,000 processors, and AMD plans on 40,000,000. We'll assume that both companies will have fabs at or near capacity by this time (a decent assumption). This will mean that Intel has 3 times as many fabs, and will produce about 4 times as many processors. This means that, per fab, Intel has more space, or more efficient processes with higher yields (or both).

    Plus, Intel claims it will build or convert 7 fabs to .13u by the end of 2002. Essentially, this will allow as many or more processors as they can produce right now, and on a more superior process. AMD will have to slowly shift their manufacturing equipment in their Fab30 plant, which will limit production.

    As for market saturations, it is difficult to measure the "world's demand" for microprocessors. Both AMD and Intel have to sell everything they produce. When Intel or AMD make 1,000,000 processors, they do not go into a warehouse. If they did, then they would quickly depreciate, and the money lost would hurt either company. Instead, Intel or AMD sells their processors to distributers at or below their official price.

    If demand is high, then Intel or AMD gets full price. If market demand is low, they will lower their prices so as to still sell every single processor. So your estimation that AMD can support 50% of the world's demand for microprocessors is not correct. AMD can only support 50% of demand if they produce 50% of world's microprocessors, and in the near future, this is not possible.

    I did a calculation last year after the Q3 earnings report, and I found that AMD can only possibly attain 21% market share in 2001, given what they can produce. Because remember that if Intel can't sell all their processors at full price, they will still sell them at the discount price. So it will take a while before AMD can out produce Intel.

    This is just an observation, but I believe Intel has the upper hand in manufacturing for the next few years, at least.

    By CajnDave January 18, 2001, 08:38 AM

    Here is some more info for those looking to invest in AMD. http://electic.com/webnews.shtml#979775138

    By AbsolutZero January 18, 2001, 11:14 AM

    AMD is up another 10.5% today! Woo-hoo!!

    People are finally realizing that their sales growth is beating Intel and surprising analysts. Unfortunately, the people here knew that when AMD was much higher that where it is today, $20.38 a share.

    By Arcadian January 18, 2001, 01:08 PM

    quote:Originally posted by AbsolutZero:
    AMD is up another 10.5% today! Woo-hoo!!

    People are finally realizing that their sales growth is beating Intel and surprising analysts. Unfortunately, the people here knew that when AMD was much higher that where it is today, $20.38 a share.

    Just so that you know, AMD missed their estimates by $.02 and forecast a slippery Q1. However, I'm sure investors can give them a little. After all, they can literally double their share price, and still have a P/E ratio smaller than the S&P average (and Intel's, too).

    By AbsolutZero January 18, 2001, 04:05 PM

    quote:Originally posted by Arcadian:
    Just so that you know, AMD missed their estimates by $.02 and forecast a slippery Q1. However, I'm sure investors can give them a little. After all, they can literally double their share price, and still have a P/E ratio smaller than the S&P average (and Intel's, too).

    I believe the market had already factored the lowered earnings estimate into the price the last month and was pleasantly surprised at the slightly stronger sales than expected and the company's outlook for 2001. http://dailynews.yahoo.com/h/nm/20010117/tc/advancedmicro_earns_dc_4.html . The CEO called the P3 "dead meat" ! Oh and btw the stock is now up over 20% today.

    By Arcadian January 18, 2001, 04:22 PM

    quote:Originally posted by AbsolutZero:
    I believe the market had already factored the lowered earnings estimate into the price the last month and was pleasantly surprised at the slightly stronger sales than expected and the company's outlook for 2001. http://dailynews.yahoo.com/h/nm/20010117/tc/advancedmicro_earns_dc_4.html . The CEO called the P3 "dead meat" ! Oh and btw the stock is now up over 20% today.

    Well that's good!

    I own a little stock in them, after all. However, they have a lot of work ahead of them, since their Palomino processor has been delayed once again. Their CEO claims that 1.4GHz and 1.5GHz Athlons will arrive in Q2, along with their Palomino core. I believe 1.4GHz was supposed to be available this quarter with the Thunderbird core.... Oh well, I'm sure they can convince everybody that it's "on time".

    1.3GHz Thunderbirds should be popping out next month, but we'll see when that happens whether it's a Thunderbird or Palomino processor.

    I also love the way they continually say that Fab30 is at 50% capacity, yet processor production goes up. Fab30 has been at 50% for the past 4 months. Either capacity is larger than 50%, or AMD isn't making record processor sales, though I don't know which is which.

    In addition, AMD claims that 8 million processors will be produced in Q1, but only 6.5 million will sell. Does anyone know what this means? Does that mean that 1.5 million processors get thrown away?

    I think it's great that Duron market share in retail home PCs has grown to 21%, but I believe this was at the expense of Athlon. AMD now claims that Athlon market share equals Duron market share, and I know that Athlons used to have more than 21% market share last year.

    AMD still claims that 130nm production will be ready for Q4 2001, but if "on time" means the same as it does for Athlon processors, I will expect it in Q1 2002.

    Again, though, I seriously hope they do well, but their Q4 financials didn't exactly raise my spirits too much. If anyone disagrees, feel free to post. I believe that AMD isn't prepared to get the market share they claim, though.

    By whistler January 18, 2001, 08:23 PM

    I'm way out of my depth in this thread but I did spot one mistake... Trainspotting was set in Scotland, not Ireland

    By d-zen January 18, 2001, 09:08 PM

    Just some additional information for your investing needs. Intel just closed down their chip plant in Puerto Rico. Indeed troubling time for Intel it seems.

    By Arcadian January 18, 2001, 10:09 PM

    quote:Originally posted by d-zen:
    Just some additional information for your investing needs. Intel just closed down their chip plant in Puerto Rico. Indeed troubling time for Intel it seems.

    Hmm... Puerto Rico was an assembly plant. I would wonder what the reasons behind the closure was before assuming it was because of financial troubles. Intel has enough dough to keep any plant they want open, so I would think the reason for closure would be a) because of the area, or b) they didn't need any more assembly plants, and upkeep was too high. Who's to say, though....

    By anubis44 January 19, 2001, 12:29 AM

    [QUOTE]Originally posted by whistler:
    [B]I'm way out of my depth in this thread but I did spot one mistake... Trainspotting was set in Scotland, not Ireland

    Not a problem. Anybody is welcome to post on this thread, and I'll say that because I started it. Incidentally, I'm sorry I didn't spot that mistake myself, as I'm part Scots myself. I suppose I must have glossed over it.

    By anubis44 January 19, 2001, 01:26 AM

    This one'll be long

    First off, in the spirit of the original intent of this CPU/Overclocking forum, I want to announce that I finally managed to clean off the level 1 bridges on my second computer's OEM 700MHz Duron chip, re-pencilled them, and have now managed to successfully overclock it to 1GHz (1.85v setting on Abit KT7)with the help of a little Arctic Silver (great stuff) and only the limited cooling powers of the no-name, crappy heatsink/cooling fan that came with it. Just for reference, if you ever have an Athlon/Duron that stops allowing multiplier changes, make sure to clean off the old graphite with a CLEAN eraser. If it's even somewhat dirty with graphite, even if you THINK you've cleaned the chip, there's probably some still on there that you can't see. Why no FOP 38-1 you ask? We'll that's sitting on my 1st computer's Athlon Thunderbird 750@1GHz right now. At $60 Canadian (I still can't source these wholesale yet) and in light of the success I've had with even a shitty stock heatsink, I didn't see the need to rush out and buy another one. Now, on to the matter of AMD as an investment, and my rebuttal of Arcadian!

    <>

    In the spirit of fun... 'Hey Arcadian, you're even smarter than I thought!'

    <>

    Actually Arcadian, I don't want to piss on your Corn Flakes(tm), but some analysts are thinking that, rather than having any manufacturing difficulties with 1.3GHz or higher Athlons, AMD is simply giving some of their customers like Gateway a break from the MHz wars. After all, the Pentium IV was quite a letdown, and AMD doesn't feel the need to match it's clockspeed, since the Athlon compares quite favourably even at 1.2GHz on most benchmarks. As you know, computer manufacturers end up getting hurt when the chip makers keep upping the ante in the clockspeed wars, and they get stuck with slower processors that they only just bought. Think of it as a concession to the public's reasoning powers. AMD knows that the public is intelligent enough to realize that higher MHz doesn't necessarily mean faster performance, and they're capitalizing on it, while buying breathing room to refine their next products.

    By the way, here's a blurb on AMD's latest earnings report by Robertson Stephens:

    "In spite of a very difficult Christmas selling season for PCs, AMD managed to grow processor units from 2.3% QoQ, to 7.0 million units, a clear indication to us that the company is gaining market share. Given the company's flawless execution in ramping Athlons on 0.18 micron copper-interconnect technology, the strong demand for Athlons at speeds 1GHz and higher, and the recent availability of the KM133 integrated graphics chipset from Via that should spur sharp growth in Duron sales, we believe the company is particularly well positioned to continue its market gains over the coming quarters. Additionally, we look for a shifting product mix to drive blended ASPs higher given what we believe is strong demand for higher-ASP Athlons, excellent processor yields, the end of life of the K6-2, and the introduction of new mobile processors in the 1H:C01. As a result, we are upgrading AMD to a Buy from an LTA rating. We are lowering our 12-month price target from $27 to $24 to reflect the recent weakness seen in the PC environment. Trading at only 9.8 times our revised F2001 EPS estimate of $1.90, we feel AMD's current valuation provides a particularly attractive entry point for investors in light of its historical NTM P/E estimates."

    No matter how you slice it, this company is like freaking Superman right now. In the morning (all of 2000), they go out and beat up a half-trillion dollar company (by market capitalization near their peak stock price last year) Intel, and steal market share away from them like a brute beating up a little child, with less than 1/10th the resources of Intel by any measure. In the afternoon (December), they win an important patent lawsuit infringement case against Alliance Semiconductor and settle favourably out of court, with damages paid to AMD (and a ROYAL AGREEMENT(!) to boot), then later, they leap tall buildings in a single bound and annouce the intention to open a THIRD, 4 billion manufacturing facility (with partners to share costs), then dramatically grow their earnings sequentially in the midst of a terrible computer market meltdown in Q4 of 2000. If that's not enough, they also win award after award for both their processors and flash memory from companies like Volkswagen, Siemens, Cisco and Nortel. Still not enough for a single "day's work"? Well, they just wouldn't be Superman if they didn't also ally themselves with Transmeta to make servers, sign up to sell all of the flash memory they can make for the next two years in solid, price-protected contracts, break ground on another joint FASL flash memory factory with Fujitsu, AND sign a long term agreement with PALM to be their principal flash memory provider through 2003, would they? Maybe for an encore, they'll beat up all of the X-Men, cure cancer, feed everybody on the planet, and save the Earth from a rogue Asteroid using AMD-equipped, modified nuclear tipped ICBMs.

    <>

    Actually, Arcadian, AMD's 'official' position is that Fab 30 is only at 30% capacity right now. What I think is going on is that AMD hadn't filled up the available floor space with all of the equipment they were going to put in there until recently. If only half of Fab 30's cleanroom capacity is at 50% capacity, then Fab 30 is said to be running at "50% capacity", but if they then bring in all the cleanroom equipment to fill up the OTHER half of the factory's available floor space, then you've just added more capacity, haven't you? I think this should be VERY, VERY worrisome for Intel and Intel-lovers like yourself, that AMD STILL has MORE capacity left in their 'Deathstar' Fab 30, the factory you said wasn't as 'Mega' as I'd like to think. Perhaps YOU were wrong about that one.

    <>

    As much as you'd like to hear that, the answer is no, they don't get thrown away. They actually get sold in the next quarter, when AMD will need more chips than the previous quarter to keep up with demand. Remember that AMD is going to make 1GHz their 'entry' level Athlon now. I'd be willing to wager that all of those 1.5 million 'extra' chips are 1GHz or better.


    <>

    Doubt it.

    <>

    I guess the rest of the entire stock market disagrees with you. They seemed to be very impressed with AMD's report. AMD, as I'm sure you must have noticed, closed up almost 22.64% on the day at $22.69. I'm just glad you had enough sense to own some shares yourself. If AMD were valued like Intel (and why shouldn't it be?), with a P/E of 21, they'd be worth $56/share. That's what I'm targeting now.

    O.K., your turn now...


    Contact Us | www.SharkyForums.com

    Copyright © 1999, 2000 internet.com Corporation. All Rights Reserved.


    Ultimate Bulletin Board 5.46

    previous page
    next page




    HardwareCentral
    Compare products, prices, and stores at Hardware Central!


    Copyright © 2002 INT Media Group, Incorporated. All Rights Reserved. About INT Media Group | Press Releases | Privacy Policy | Career Opportunities