Advanced Micro Devices Inc (AMD)

[bobs10]

Given that after H105 we're at about 17-18M (8.5-9M/Q), shipping 12M in Q3 and Q4 would only put the 2005 total at 41-42M.

Me...

That's where I'm coming from with the shortage angle I keep stating. I figure AMD will have about 5 to 6m more chips to sell in H205 than H1 plus the carryover of inventory. Given that the carryover is probably mostly pre "E" stepping I figure it's probably low-end stuff. On paper that sounds like enough to tide AMD over, but product allocation will become a lot more improtant.

I'm factoring in a much stronger demand for AMD's products than seasonality into my estimates for q3/4. These estimates are largely based on all the new products that are coming out or came out recently and the continuing OEM design wins, particularly Turions. Then there's the increases in distributor wins and SUN which should continue to increase sales of AMD processors but might have a bigger demand than expected by the end of the year. The biggest question mark is Truion which really might surprise. Centrino supply/pricing will have a big effect. Dual cores could also give a nice bounce to earnings as AMD's offerings seem much better situated for that market than INTC's. Lots of possible factors and they're all positive.

In any case q3 should be very good and q4 excellent as far as earnings go. It will be interesting to see just what effect of getting close to max capacity has on the financials. I sure hope MirrorBit continues to gain acceptance as flash remains the fly in the ointment.

The one thing certain in all this is that the Dresden plant manager is really going to be earning his pay.