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hitimer: I would expect that the conversion to FPGA and the release of technical info will pretty much coincide. After all, that will be when they know the actual parameters of the technology.
Interestingly, there are some tasty tidbits in some of the other Q&A responses. Somewhere they very clearly say that the technology will be several hundred times faster than dialup. If we take "several" to mean at least 3, then we are talking about a minumum of 17Mbps - significantly more than I expected from an initial product.
wbmw: Yeah, I forgot about the tax credit.(eom)
wbmw: I based the 300M loss on the fact that they lost 185M last quarter on 615M in earnings. Assuming that the cost structure remains the same as last Q, that means pretty much 300M on the button for revs of 500M.
Looks like close to a 300M loss for AMD this Q. I was tempted to buy at $5. Glad I didn't. I can't really see that Intel's ASPs are any better than AMD. Could we see an Intel warning too, or are they in their "quiet period" now?
Dang, the market is ugly.
Good stuff on the new Q&A page.
It might be worthwhile to go back and look at my previous post (#5058) on the development process as compared to the one posted on the Q&A page. I said:
1) Model the technology completely in a computer environment. No hardware at all. There are many workstation applications that allow you to do this. Once you have a design that you feel is a good one, go to step 2.
2) Develop a programmable prototype using off-the-shelf development hardware and software. This is typically done with programmable logic devices like FPGAs or CPLDs (Complex Programmable Logic Device). Once the prototype is done, go to step 3.
3) Test the prototype in a laboratory environment using line-simulation software and hardware. These simulations model the behavior or real-world lines. There are many such tools available. When the testing is being done, you can reprogram the FPGAs on the fly to address bugs, etc. When you are satisfied with the laboratory testing, go to step 4.
4) Test the prototype on an actual service loop. This is where the rubber meets the road. If the prototype works here, the final product will work as well. If the process is done correctly, the final product will do *exactly* what the FPGA prototype did. <-------- YOU ARE HERE
6) Once you are satisfied with the the prototype in the field tests, you fab an ASIC. This is a relatively simple process (though deceptively complex). You simply take the FPGA code to an ASIC Foundry like TI, LSI or Atmel (there are hundreds of ASIC Foundries) and they can rather quickly map the FPGA code to an ASIC design. How quickly depends on the complexity of the code, but it can be done in a few weeks to a couple of months. (Cheap, Fast, Good - pick and two - applies here)
It looks like I was pretty close with the steps, and we are actually pretty close to where I thought I was. From the NVC site:
1. Develop the technology and simulate it in the lab: Complete
2. Create a PC-based system which you take in the field and test on real lines: Nearing Completion
3. Create a hardware prototype using FPGA: Scheduled this year
4. Manufacture in the form of a finished chip (which may require additional engineering): Scheduled 2003
So, it looks like NVEI chose to develop the "alpha prototype" as a PC-based system rather than as a true board-based prototype. So, the technology *is* being tested, just on a PC rather than an FPGA card. Once complete, it *should* be a simple matter of dumping the code from the PC to the FPGAs on the card.
Makes sense, now that they cleared everything up.
Elmer Phub: I cannot tell if you are intentionally being obtuse or socratic. I will assume it is the latter.
I thought that it was fairly common knowledge that for a design change, there will be a significant amount initial and on-going "tweaking" necessary to improve the process. As such, yields will generally improve as the process is improved, but may be poor initially. Am I incorrect in this assumption?
Elmer Phud: Re: "You claim to have no industry knowledge but you didn't get those numbers from out of thin air."
I did not claim to have no industry knowledge. I did claim that I am not an industry insider, nor am I any kind of process engineer. My technical expertise lies elsewhere. I freely admit that I have only a rudimentary knowledge of how microprocessors are manufactured certainly in comparison to some of the very knowledgeable people who post here.
I got those numbers from Google and the AMD web site. Not that hard really.
I claim ignorance because I do not know how much of the Fab's capacity must be dedicated to both Hammer and Barton even though they are not in production. With the long lead times from raw wafers to final product, I would expect that some fraction of the tooling, instruments, floor space, or what have you must be dedicated to those lines. I do not know what that fraction is. You say it is insignificant. Can you provide a reasonable estimate and some reasonable basis for that estimate?
As for the "best yields in the world", I think that everyone knows that was Sanders hype. That quote is also 2 years old at least. There have been two shrinks since then. Who knows what kind of yields they are having now. You don't and neither do I. The best I can say is that yields are better than 37%.
The quote "normal yield contraints" has been taken out of context just about every time it has been quoted (or misquoted). That statement was in reference to the "B" revision of the Tbred. It is a new process and is, as others have pointed out, subject to the yield "contraints" that accompany any immature process.
I won't argue that Hammer is broken. The real question is how long will it take to fix it.
As for Barton, I suspect that it has been redesigned to incorporate the same changes as Tbred underwent - hence the delay.
Tenchu: Re: Vapor launch
The vapor launch of the XP2400 and XP 2600 was done prematurely, I believe, in order to coincide with the 3rd anniversary of the Athlon. It was purely a marketing ploy. 2400s are starting to trickle in, but 2600s are still MIA.
I have no doubt that with the new "B" stepping, there are yield problems and possibly binsplit problems as well, but these are to be expected with a new stepping that contains significant changes.
To me, the real issue is that AMD is behind the performance curve, and they are trying to get caught up with PR (public relations - not the other PR). I do believe that they will get the Tbred "B" stepping ramped up nicely, but I am disappointed that they "released" them before they had volume parts simply for the press.
Tenchu: 8M is based on somewhat old data - 1Q02. That came directly from the AMD quarterly report. AMD did not report units sold in 2Q, though revenue was down 33% Q/Q so one would assume that units sold fell, though I do not know how much. I believe that much of the revenue decline was due more to sharply declinings ASPs than to decreased units sold. But is certainly a fair assumption that they did not sell 8M units in 2Q.
I agree with your statement about binsplits. However, it is even more difficult to speculate about binsplits that yields. Based on the excellent overclockability of the lower speed grades for Tbred "A", it would appear that binsplits are pretty good for that stepping. I have no idea about the "B" stepping though.
Elmer Phud: Re: "Yes you do"
Hmmm. A bit of a cryptic reply. I will try to explain myself more fully.
Things I know:
According to AMD, Fab 30 starts about 5000 wafers per week.
Thoroughbred die is 80 mm^2.
Clawhammer die will be about 106 mm^2.
Barton die size will be about 115 mm^2.
AMD sells about 8 million CPUs per quarter, or about 615,000 per week.
Things I can reasonably speculate about:
Using a reasonable model for edge exclusion, there should be about 330 Thoroughbred die candidates per wafer. Hammer should be about 248 die candidates, and Barton should be about 224.
Things I do not know:
How much capacity at Fab 30 is given to Hammer development and production.
How much capacity at Fab 30 is given to Barton development and production.
How many processors per week AMD is producing now.
Assumptions:
If it is assumed that 100% of Fab 30 production is for Thoroughbred, and AMD is still selling 615,000 units per week, and Durons are completely phased out, then yield calculation is simple. 615,000/5000 - 123 units per wafer, or a yield of 37%
If it is assumed that 75% of the Fab capacity is given to Tbred production, the yields are about 50%.
If it is assumed that 50% of the Fab capacity is given to Tbred, then the yields are about 75%.
I have no information to help me decide which of the above assumptions are closest to being correct. Of course, one could say that no matter which processes are in production, they are producing about 615,000 unite per week and you can get yield from that. The problem with that is that we do not know the breakdown of the different die sizes for the different processes. One could also argue that the problem could be bounded by worst-case. In that assumption, the worst-case average yield is 37%. However, this tells us nothing about the yields for mature processes like Tbred "A" versus new processes like Tbred "B", Barton, or Hammer.
The Duke of URL: This is getting tiresome.
I have been told by many that it is common practice for Yousef to place things in quotation marks as a means of expressing opinion. Though this is a bit unorthodox and to the uninitiated can be misleading, I will stipulate that Yousef did not intend to mislead with his post. I have no experience with his(her?) idiosyncracies. I regret that anyone took offense to my reply.
But most importantly, it is your reasoning that offends. You intentionally start an argument over semantics to obfuscate the REAL issue.
My post had no reasoning in it. I was simply pointing out an error of attribution. I also had no intention to start an argument.
That is the very definition of fud, and it has no place on a valued BBS, although, Yahoo might be calling.
I suggest you look up FUD. You clearly do not understand its meaning. Furthermore, my opinions, comments, corrections, reasoning, or lack thereof have just as much place here as yours do.
The issue, as was so eloquently brought home to you, is that amd has had another phantom launch, and what seems to be mildly interesting is that they have not produced from the last phantom launch.
I never disputed this.
All this stuff is a waste of time and both vendors and POSTERS will get justifably mad, at having to waste time AND money and effort, qualifying parts which are not available to sell
Neither did I dispute this.
and.....taking the time to read and understand the reasoning or lack thereof of certain posts that choose to divert attention from the real issue!
Then I suggest you place me on that ignore thingy, or simply choose to not read my posts.
Elmer Phud: Re: "AMD has lied over and over again and you even seem to be agreeing that they're probably lying here too. Why not criticize them?"
I actively criticize AMD. I was one of the most vocal critics of Sanders when he sold a truckload of stock just after saying everything was rosy, only to warn of a significant miss just a couple of weeks later.
I am also very disappointed with the recent spate of production misses and paper launches, although paper launches have often been employed by Intel in the past. Nonetheless, I don't like it when eithe company does it. I cannot intelligently speculate on yields because I just do not have enough information.
"You got to be careful if you don’t know where your going, because you might not get there."
- Yogi Berra
I chose to participate in this forum with the hope and expectation that I could get away from several annoying characteristics that abound among posters in less desirable venues like RB and SI.
Specifically, like many of you, I despise the childish "who's is better" battles that rage with no hope of resolution. I also despise overt bashing. What I despise most, however, is the arrogant, condescending, snide and self-aggrandizing attitudes that many on those other boards take towards those with opposing viewpoints.
I went back and looked at my posts, trying to find something that I wrote that could be construed as provocation for this kind of rude, insolent response and could find nothing. I see now that this attitude is not the result of provocation by annoying posters, but istead is a character trait of many of you.
The header for this board openly welcomes opinions of both support and dissent, yet you people do not seem to miss an opportunity to to respond with contempt to anyone who even remotely questions anything having to do with you or Intel.
I have tried to be reasoned and polite with my posts and to participate within the TOU - specifically - simplified rule #2: "Be courteous and respectful of other folks." I would only ask that you do the same.
"You got to be careful if you don’t know where your going, because you might not get there."
- Yogi Berra
I don't want to continue to beat a dead horse, but you also totally missed the point of my post. I objected solely to the misattribution of quoted material. That's all.
If "constrained" is an arcane euphemism for "problem", then so be it. I am not an insider in the industry and as such I am not privy to its jargon. I would tend to consider, though, that the webcast was intended for public consumption and as such, it would contain language that follows the more publicly accepted connotations.
"You got to be careful if you don’t know where your going, because you might not get there."
- Yogi Berra
wbmw: I see that the essence my objection to Yousef's remark somehow got completely lost.
My point was that the poster attributed a direct quote to the spokesman that was incorrect. We can each interpret the actual words as we see fit, but if we are going to quote the webcast, we should quote the correct words.
Actually, I can read between the lines. If you had actually read my post you would have seen that my interpretation was that AMD is probably having production problems.
"You got to be careful if you don’t know where your going, because you might not get there."
- Yogi Berra
Yousef: You are being misleading...
Whether it is intentional or not, probably does not matter. You stated that AMD is now talking about "yield problems" and even went as far as to place those words in quotes. Are you sure those were the exact words?
For the record, the AMD spokesman used the words "constrained by normal yields". Never was the word "problems" used. Your misattribution, if intentional, was pure FUD.
Also, for the record, the spokesman also clearly stated that there were no manufacturing problems.
Finally, for the record, I am not trying to claim that AMD is not having yield or manufacturing problems. At least for SOI, I believe it is clear that they are. However, you do yourself and others a disservice by spreading lies about what the company said. Stick to the facts please. Or, at least clearly state that it is your opinion, rather than attributing it to a company official.
"You got to be careful if you don't know where your going, because you might not get there."
- Yogi Berra
wbmw: You should take a more balanced view of things. Both Intel and AMD are down over 80% from their bubble highs. Both are at 5-year lows. Both have cost investors huge sums of money, and both have lost a comparable percentage of share price. However, if you want to talk about mass loss of wealth, consider that Intel has gone from a market cap of 500 billion down to about 90 billion. AMD has gone from 15 billion to about 2 billion. As such, Intel has cost investors 410 billion in actual loss of wealth, while AMD has cost investors 13 billion.
Investors in both companies should have heeded the warnings. Both companies may still have a significant fall ahead of them. AMD is losing gobs of money, and Intel is still significantly overvalued by historical standards. If AMD drops below $5, institutions will no longer be able to buy. If Intel does not start to see some significant growth, its still lofty price will not be justified. I would not touch either one right now.
There - I have given my warning.
"You got to be careful if you don’t know where your going, because you might not get there."
- Yogi Berra
excel: Re:"If we are to go off that schedule due to the fact that schedule has revenues involved it would become a material event and like Brad told me he would have to notify us."
I would hope that is the case, but it certainly has not been so in the past. Numerous schedules that could impact revenues were changed or abandoned without public notification. The Hytek merger is but one example. The movie is yet another.
Forgive me if I treat the company's declarations of being on schedule with a grain of skepticism in the absence of any real evidence. I am jaded by experience.
Troy: My guess.... for what its worth (not much lately), is that we are somewhere between step 2 and 4. I know that there is an FPGA board. I have seen pictures of it. Unless it is a stage prop, and the company is lying about having produced it, I would have to say step 2 is complete. As for which stage of testing they are in, I will guess no more on that one.
excel: I'm glad that you understand it.
However, based on what WHP03 said, this:
...in this past quarter we completed the assembly of our first chip platform, implemented in software form. This enabled us to simulate our technology on real phone lines at an incumbent local exchange carrier, Maine Telephone.
has not happened. They apparently have *not* tested the "first chip platform" at all.
My point is that the legacy of shrouded secrecy, even for things that do not require secrecy, continues.
Additionally, that test was announced as complete on July 31. Tomorrow is October 1. It was supposed to be the first in a series of tests. (How many? Who knows???) Nearly 9 weeks have passed since then. I think we have a right to know what is going on. We should not have to guess. When I guess, I am sometimes wrong, and I don't like to be wrong.
Troy: If that is true, then I am wrong.
I sure would like to see NVEI do some straight talking. I am now at a loss for how it might be even remotely possible to test a technology when you do not use the technology in the test.
I am getting dam tired of trying to read between the lines.
Troy:
I am quite certain that the FPGA "alpha" prototype was used in the Maine test. Look at the following statement:
New Visual recently completed its first preliminary field test of a new semiconductor technology that promises to transmit data at greater speeds over longer distances using regular copper telephone wire.
They tested the technology. It's there in black and white. As for this:
The results of this first in a cycle of simulations indicate that New Visual's underlying signal processing and simulation technology works as expected.
Again, this is the confusing use of the word "simulation". The FPGA alpha prototype is the "simulation" technology. The FPGA programming is "simulating" the final product. At least, that is what I believe.
The objective of the test was to determine if New Visual's sophisticated field simulation model accurately measures and adjusts for noise and attenuation, which determines the signal-to-noise ratio, a key measure of the performance of a transmission technology.
The primary goal of the "technology" IMO is to measure and adjust for noise. That is the key to success. I still feel that this is clearly a test of the technology.
I think it becomes clearer in the following statement:
The objective of the test was to determine if New Visual's sophisticated field simulation model accurately measures and adjusts for noise and attenuation, which determines the signal-to-noise ratio, a key measure of the performance of a transmission technology
I am fairly certain that the "sophisticated field simulation model" is the "alpha" prototype.
If they did not test the "alpha" prototype, I cannot, for the life of me, figure out what is was that they did test. Testing the "alpha" prototype device is the only thing that makes sense.
I believe that there was little market reaction because there were no results released. Saying that the results were "as expected" means nothing unless you know what the expectations are. NVEI has not seen fit to let us know what exactly those expectations are.
On Prototypes and Shannon's law...
First off, I truly dislike NVEI's use of the words "prototype" and "simulation". Their atypical use of those words had led to a lot of confusion. I see someone dug up one of my posts on the subject. I will try to expand on that a bit.
There is a prototype that is complete. As Pengy pointed out, it was on display at the SHM. This prototype is a circuit board with what looked like 4 FPGA devices on board. There is nothing special about this thing since it consists mostly of the FPGAs, a circuit board, a computer interface and a data interface. By itself, it does nothing. In order for it to do anything, the FPGAs must be programmed. The programming is the meat and potatoes. By programming the FPGAs, the device can "simulate" a completed product, but can be reprogrammed and tweaked where a final product could not. I would call this an alpha prototype. I suppose that since the FPGAs act like the final ASIC product would, NVEI refers to it as a "simulation". I do not like this terminology since this is completely different from a computer "simulation" during which FPGA code, line conditions and data would all be simulated inside a computer. The terminology makes it confusing.
During laboratory and field tests, the programming in the alpha prototype will be adjusted and tweaked. When all of the tweaking is done, and the alpha prototype is "simulating" what a final product will do, it would, in my terminology, become a beta prototype. This is the "prototype" that Cooper refers to when he says we will deliver a "prototype" to a carrier for trials. So, there is currently an "alpha" prototype that is being developed into a "beta" prototype.
On to Shannon's law. I won't say too much about the subject. Shannon, based on the work of Nyquist, formulated the maximum signal rate that can be generated over a conductor. On a POTS twisted pair, that is generally taken to be about 34Kbps. The problem with Shannon's law is that it only describes the behavior of one channel. Modern DSL uses many channel over a single conductor and reaches speeds many times the "Shannon" limit, yet violates no laws of physics. There is no reason that the NVEI technology would be any different.
One hint: If you see anyone talking about Nyquist-Shannon with respect broadband transmission techniques, you can be assured of the following:
1) The person citing Nyquist-Shannon does not understand it.
2) It is not applicable.
wheels: I guess that, for me, it would depend on what you mean by "the tech works". The only claim being made now is that it is faster and farther than any existing technology.
The big question for me is how much faster and farther. If it is, say, 10% faster and farter, then it will be competing very heavily with existing technology in a depressed market. Telcos and suppliers will be unlikely to pay a large premium for a 10% gain. In this case, I doubt that NVEI would succeed, and my buyout price would be quite low. In fact, I would liquidate at market if I found this to be the case.
If the technology is twice as fast and far, then competition dwindles, and NVEI can command a significant premium over existing products. There would still be competition in some markets, but the overall market would be very big. I would like to see about $40 for a buyout.
On the other hand, if the technology is 10 times faster and farther, then NVEI will be in a catagory of its own and the demand will be huge. There will be zero competition at all. In this case, as long as the NVEI premium was significantly less than the cost of trenching fiber, they can write their own ticket. In this case, I would probably not settle for less than $100.
These are all my WAGs and are worth exactly what you paid for them.
Yousef: You clearly know a lot more about the process than I do. I would only add that it is likely further complicated by the fact that the same Fab is being used for two other product lines.
wbmw: Re: "I wasn't aware until now that you were arguing this."
Actually, I wasn't. I try very hard not to get into arguments on the technical merits of the products from the two companies. No one wins that argument. Each has its advantages and its shortcomings. They certainly do compete aggressively with each other, so it is arguable that each has a competitive product lineup. This is certainly true compared to say, Via, who most decidedly does not have a competitive product lineup.
Incidentally, I do not think that SOI is DOA at all. It may not appear in Barton, but I believe that Hammer will use it. SOI is a completely new process, however, and I agree that it is fairly certain that AMD is experiencing what I believe is primarily yield problems, though the low speeds of the engineering samples out there hint at poor binsplits also. There is no doubt that there are process problems. The real question is how soon they can be worked out. It took several months to get a good Tbred stepping and we still do not see volume parts.
Duke of URL: Re: "You just don't get it, do you?"
There IS no reasonable belief that with a tighter money market in the future, they will be able to continue to borrow to stay in business.
First off, it is not clear at all that AMD will have to borrow to stay in business. Last I saw, they had about a billion in cash or cash equivalent. There certainly *IS* a reasonable belief that AMD will stay in business. If there were no such reasonable belief, then every fund manager and investor would have dumped AMD altogether. Currently, institutional ownership constitutes more than 50%. I am not saying they are right or wrong, I am merely stating fact.
This profit thingy, well that's the way businesses are unemotionally analyzed, without the rah rah mine is bigger than yours is thingy.
Isn't that what I said? Did you really read my post?
Companies that make money are good and they go up and down and up; companies that don't make money go up and down and down.
Not entirely true. Some companies that make money go up and up and up, and others go down and down and down. But it is certainly true that making money is an important factor in long-term share price appreciation. I do not recall saying that it wasn't.
The understanding of this sort of thingy is how good investors make money and is also called capital allocation.
Well, that is not exactly how I would define "capital allocation" but I do agree that understanding that "making money is good" is important to any investment strategy.
Those that prefer to post eloquently are called "losers".
In the future, I will endeavor to use the word "thingy" more frequently lest I be accused of eloquence and labeled a loser.
The stock price follows the value of the company not the reverse, and those that consitantly talk about short term movements, unless they are refering to capital generation, are better off buying bonds, don't you agree?
No, actually, I don't agree. The stock price follows the perceived potential thingy of the company, not necessarily the value of the company. If, in fact, you were correct and the stock price represented the value of a company, then every company that is currently losing money would have a price of zero. There are a lot of good companies losing money right now. The fact that the share price thingy for these companies is currently non-zero indicates that the market perceives the potential for these companies to make money in the future.
As for short-term investing, well there are many investment strategies. I prefer diversification in both my portfolio thingy and my investment strategy thingy. I have a portion of my portfolio in diverse long-term investments, a large portion is currently in cash, a smaller portion is in a bear fund, and another small portion is for speculation. I use some of my speculation funds for swing-trading and short-term speculation, and the rest is invested in some high-risk issues. I will commit my cash to more diverse long-term investments when a clear recovery is underway. My strategy thingy has been largely successful, but is not for everyone. To each his own, and caveat emptor.
wbmw: Well said.
As for valuations, it is virtually impossible to value a company like AMD that is presently at a crossroads. Although their position is similar to that 5 or so years ago, I believe it is marginally better now. Nonetheless, in the next few months, AMD will either return to profitability, fold, or be bought out. I see no other possibility.
To return to profitibility, several things must happen. They must have a competitive product, they must see a recovery in Flash, and they must either see a PC recovery, or increased market share.
AMD has recently paper-launched products that appear to be competitive. We will know in just a few days if there are volume parts or not. The Hammer delay hurt, but in retrospect it seemed inevitable considering how much they are trying to do with that single Fab in Dresden. If AMD can finally execute on Hammer, they will be more than competitive.
We will just have to agree to disagree that Intel has a much more competitive product line. That may be true today, but may not be true next week.
Flash is too hard to call right now. Even if AMD's processor business recovers completely and they execute flawlessly, they will likely lose money without a Flash recovery. Inventory is clearing, though, so it might pick up.
Market share is a bit tricky. Contrary to the popular opinion that Intel has the tier one manufacturers in its back pocket (except Dell obviously), I believe that AMD could gain several design wins and get tier one penetration if they were better able to meet the tier one needs in terms of volume and support. I have heard grumblings that support to the tier one companies is one of AMD's biggest shortcomings.
So, AMD could go wither way. Whichever way it goes, it will be dramatic. I have been tempted to dump some speculation money into AMD at these levels just to ride the next rally.
But I am rambling... My point is that valuing AMD on earnings is impossible - there are none. Valuing them on visibility is difficult too. In the past, one could generally assume that tangible book value represented a good bottom, but AMD has blown through that as well, as have many other companies.
Valuing Intel is a bit easier since it has stable earnings. Though I am not really interested in either stock right now, I would buy Intel if it approached historical valuations. I would definitely be a buyer in single digits.
greg s: Re: "For the long-term, I do believe that Intel is positioned to be one of the winners."
You may be right, but that may not be the case if the markets return to more traditional valuations. Intel is still trading at 30 times trailing earnings. That is quite a premium over its pre-bubble average of about 15. Now, I recognize that current trailing earnings are somewhat depressed, but forward visibility is still not good, and there is at least some informed doubt that the PC market will ever resume its former growth rates. There is also growing evidence that CPUs are becoming commodities and that ASPs will never return to previous levels.
Having said that, I doubt that Intel will ever trade at 15 times earnings again. They have earned a premium as an industry leader. The real question is what premium will the market allow. Currently, that premium is a P/E of 30, but that has been steadily dwindling. I suspect that it will settle around 20 to 25.
wbmw: Both stocks have tracked almost identically over the last 5 years, and both are down approximately 50% over the last 5 years.
There are a number of ways to define losers. One could say that since AMD (I assume that is the "loser" that EP referred to) lost slightly more is share price over the last 5 years then it is the bigger loser. However, if you look at the total loss of wealth, Intel has cost investors a net of about 100 billion over the last 5 years, and AMD has cost investors about 1 billion. So that qualifies as a big loser. Intel is making money, and AMD is losing big money right now - so AMD is the loser there. So, both companies can easily be called losers.
Incidentally, I chose 5 years since that is typically the benchmark used to define "long-term".
Elmer Phud: I guess it depends on how you define winners and losers. I find it very difficult to support the position that Intel is a winner right now.
greg s: Re: Semi stocks
I believe that they are basing now, along with the rest of the market. In general, many stocks have returned to pre-bubble valuations, and the recent market activity seems to indicate that a bottom is at least being explored.
As for turning up, obviously, the real driver for significant upward movement will be one or both of the following: Better forward visibility and/or sustained earnings growth. I will not try to address the entire semi sector, but instead will concentrate my opinions on the PC sector.
Clearly, the primary reason for the depressed PC market is the lack of growth. I attribute that to the following:
1) Late or non-existant upgrade cycle. Others have alluded to this, and I think it is a real obstacle. The last major upgrade was in late 1999 and by historical measure, we are well past due for another. However, many companies are reluctant to do so for several reasons. First, 3 year old hardware is still sufficient for most office applications. After all, what most business PC users do is e-mail, internet and word processing. I venture to say that if you were to place a PIII 800 machine and a P4 2.8 machine in front of the typical office worker, ask him to use each machine for the above applications and then tell you which one is faster, it would be hard to tell. Even if he could tell, I doubt that the difference would be significant enough to warrant an upgrade.
My organization is a perfect example. I have 280 employees and about 130 desktops and 20 mobiles. Most of those are at least 3 years old but, despite the protestations of my IT manager, I will not upgrade. Most of my users only do e-mail and light word processing. There is just simply no need to upgrade.
Second, there simply is not enough discretionary funds for IT departments for upgrades. Most companies have felt the effects of the recession, and as many of us know, IT budgets are among the first to get cut.
2) Slowed global penetration. In the US, the PC market is near saturation. I seem to recall that a large percentage (80 plus, if I remember correctly) of PC sales were to people who already had computers and were upgrading. There are few computers being sold to newbies anymore. As hardware development continues to outpace software requirements, the number of upgrades will decrease. So the real growth market is global growth. That seems to have stalled as the global economy is no better than ours at present.
3) No killer apps. This was hinted at in both 1 and 2 above. Hardware development is dramatically outpacing software requirements. Most OSs and software will run just fine on a 3 year old computer. There are very few software packages that challenge current systems.
So there are a lot of reasons for the current PC doldrums. However, I do believe that the first hint of sustained economic growth will drive and upgrade cycle - even though the hardware might still be sufficient to be productive. I believe that the main upgrade driver will be that most managers do not like to have old equipment, and as drives, monitors, and peripherals begin to fail, it will quickly become apparent that upgrade is a better option to repair. So, I look to see a significant upgrade cycle begin early next year.
Another contributing factor to an upgrade cycle is that, for the most part, businesses have missed out on an entire Moore's Law cycle. I suspect that like my organization, most businesses have sub-Gigahertz systems as the majority. By early next year, systems at over 3 GHZ will be commonplace. Many companies will want to catch up.
Finally, if there is an upgrade cycle looming, I think it will be a big one. Because of Y2K, most companies did their last upgrades at roughly the same time. I believe that synchronization will survive into the upcoming upgrade cycle.
Elmer Phud: I do not intend to get into a conflict on the issue. There were some broad generalizations about AMD supporters being "lame" and "losers". Certainly not TOU violations, but also not very polite. No big deal, really.
I intended no insult. If you took it otherwise, that is regrettable. I will assume that you meant no insult with "holyer than thou", "transparent", and "pedestrian".
I have contributed before, and I will again.
With all due respect....
I have been reading this board for a while, and have been hopeful that it would represent a civilized alternative to the typical foolishness that pervades other boards. Although I am an AMD supporter, I have always enjoyed intelligent discourse, regardless of the point of view.
However, I see that at least some of you are given to the same broad generalizations, insults and self-aggrandizement that is the trademark of the other boards.
Your blithe insults are immature and tend to detract from anything else of value that you might have to contribute.
Alas, it seems that despite your claims of refuge on this board, you cannot seek refuge from yourselves. Pity.
777s: As a shareholder, I voted a stock option plan. I really have no problem with that. My beef is with the 2.5 Million options that were given out that were outside the plan.
Apparently the plan that we voted was not good enough. Nice to know that our management can choose to either follow or ignore the plan at their whim.
Cracker Jack: Re: Don't get some of the anger I sense here.
I cannot speak for any others, but I am not necessarily surprised by the 10-Q though I am a bit angry. It is not the lack of cash that concerns me, particularly. Rather, it is the continued shady dealings, lack of communication, and generosity with shares and bonuses that gets me. Couple that with the lack of news recvently, the ever-approaching end of summer with no movie (4 days, 20 hours and 6 minutes left in summer) and the realization that, at the current handout rate, the number of outstanding shares will approach the authorized limit by the time we realize significant revenues.
I had high hopes that Cooper would bring some semblence of professionalism and decorum to this company, yet I see where he signed a bizarre, highly questionable "consulting" agreement with Winehouse and another one with Cono. That is still "Busch League" and stinks of OTC:BB shenanigans.
I am still long, but there are far too many secrets for me to be happy about it. I want the company to be honest and forthcoming. I want to know what the technology can do. I want to know how much of our potential revenues we have given away to ANI in royalties (that is a white elephant that nobody has addressed). I want these shady deals masquerading as "consulting" agreements to stop. I want the company to stop handing out shares and money like they are candy.
In short, I want this company to start acting like a "grown-up" company.
The good, the bad and the ugly...
In reverse order.
The Ugly:
In the last 9 months, the number of outstanding shares has risen 18,230,556. At this rate, it will take another 24,307,408 shares issued to get us through the next year and to Cooper's expected revenues. That means that when we do (if we do) see revenues from the technology, there will be 72,541,645 shares outstanding.
At that same time, at the current rate of accumulation, the total defecit will be $54,102,469.
The Bad:
There are now 4000 shares of Series B Preferred stock out there that are redeemable at $1000 per share. This redemption is triggered by any financing event that exceeds 3 Million dollars. So, any small scale financing efforts could be offset by Series B redemption.
There were $340,000 in bonuses accrued in the 9 month period. In general, it is my opinion that bonuses should only be paid for successful completion of a job well done. Haven't seen much of that.
In the last 9 months, over 4 Million stock options were granted that were outside of the stock option plan. 1.5 Million of those were for Cooper. The rest were hand-outs.
This paragraph really gripes me:
On July 30, 2002, the Company granted a consulting company warrants to purchase 1,000,000 shares of its common stock at an exercise price of $.75. These warrants replaced warrants covering 1,000,000 shares of common stock issued to the consulting company in May 2001 that had exercise prices of $2.50 (as to 500,000 shares), $5.00 (as to 250,000 shares) and $10.00 (as to 250,000 shares). The fair value of stock warrants estimated on the date of grant using the Black-Scholes option pricing model is $.047, or $46,737.
Who is the consulting company, and why are we replacing existing warrants with warrants at a much lower strike prices?
This one also bothers me:
On July 17, 2002, the Company entered into a one-year consulting agreement with an individual for consulting, advisory and related services. The Company agreed to pay the consultant a one-time payment of $250,000 in the event the Company receives gross revenue in the amount of at least $2,250,000 from the distribution of the Company's motion picture.
So, in the event that the movies does generate revenue, the first $250,000 goes to this consultant. For what? OK, as I read further, it looks like this is for Cono. Is this hidden interest for the half million loan? What did this "consultant" do to earn 250K?
This one has always bothered me:
The Company's projects under development stipulate royalty
payments that are based on percentages of revenue.
So, we will owe royalties to ANI when our products sell. How much? What is the percentage? It could be anywhere from 1 to 99%. This is pretty important to future earnings potential.
We also borrowed half a million dollars from Cono. I think it is better to borrow than to sell stock, but the note is a balloon note payable in November. This seems like robbing Peter to pay Paul.
A whole slew of Convertible Notes. Ugh.
There is another "consulting" agreement with "Advisor Associates", AKA Winehouse. He gets 350K of restricted stock and 1,000,000 warrants. For what? Oh, here it is:
The Shares and Warrant shall be deemed fully earned as of the
date hereof, and shall not be subject to or conditioned upon any event or circumstance whatsoever.
and
Consultant shall solely and exclusively determine the methods, details and means of providing the Consulting Services hereunder.
What's more, Winehouse gets expenses for this "consulting". This has Ray's fingerprints all over it.
Should have put that one in the "Ugly" section.
The Good:
Management will be deferring salaries.
Elmer Phud: I was not aware that Intel has publicly maintained that they would keep pace with Moore's "law".
It is, in fact, not a law at all. It is a trend. It is not based in physics, and there is nothing that requires that it be followed.
I cannot say when, but there will come a time when the actual bona fide laws of physics will prohibit Moore's "law".
Moore's "law" would seem to require ever-decreasing geometries, yet, quantum physics places a firm bottom on the size of electronic elements. In fact, most leakage in modern CPUs is due to quantum tunneling, and smaller geometries will only make that worse. So, I can't say when Moore's "law" will break down, but it is not too far off.
Excel:
Yeah, I saw that. Before ever giving a web site my e-mail address, though, I always read the privacy policy. If it says that they may give my address to other people, I do not sign up. Edgar clearly states that they will give my e-mail to other people. Call me paranoid, but I refuse to allow that.
I can get it free on Yahoo anyway, without having to give out any personal information.
Thanks anyway.