Replies to post #52847 on Advanced Micro Devices Inc (AMD)

[wbmw]

Re: Short term pain = 1-time charge. Long-term gain = AMD (non-flash) stock no longer has the flash-risk penalty impacting its valuation.

Good point on the one-time charge, but I think IMHO's point was:

- Short term gain: losses in flash would not weigh down processor sales on balance sheet,
- Long term pain: AMD would be giving up a potentially lucrative long term business.

[imho]

AMD (non-flash) stock no longer has the flash-risk penalty

How quickly you forget. From AMD’s 2003 annual report "Our joint venture with Fujitsu to create FASL LLC, and the resulting launch of the Spansion™ brand of memory products in July, vaulted Spansion Flash memory products into a leadership position in the lucrative NOR Flash memory market virtually overnight. Not only have we made impressive gains in the overall NOR Flash market, but the Spansion brand has overtaken all others in the key cellular segment. Robust growth in that segment, combined with its insatiable appetite for memory-hungry features and applications, bode well for our prospects as an industry leader in NOR Flash memory for many years to come."

You telling me that 18 months ago AMD made a mistake? They did not know the flash business was cyclical? What would have happened if flash was not around at that critical time when AMD was starting to launch its 64 bit cpu’s? You believe that putting all your semiconductor eggs in one basket is the right strategy?

Perhaps you are telling me that one losing business under one roof is a lot better than two losing businesses under one roof. Ok, I see your point.

IMHO