Advanced Micro Devices Inc (AMD)

[bobs10]

Ok, I don't really disagree with you and your figures. But consider that the total processor market is going to be about 190M+ processors this year which translates into about 16% market share for AMD. Assuming AMD produces 8M units a quarter, that's a drop in the bucket. While AMD does have the capacity to choose markets to target and one would definitely hope that the target the most lucrative ones, there are limitations based on AMD's commitment to covering all markets in which they compete with INTC.

This situation will only get worse next year as AMD nears 90nm capacity. The latest estimates I've seen expect 5% growth next year compared to this years 13%+ growth. 5% growth would be about 10M more units or 2.5M units per quarter. In order to retain market share AMD would have to produce about .5M more units per quarter next year. That sounds feasible to me, but isn't anything that is going to keep B&O up nights. Nor is it going to do much for AMD’s market share.

Your right though, AMD should get progressively more profitable as we go through 05, as long as AMD retains the technology lead.