Replies to post #2869 on Advanced Micro Devices Inc (AMD)

[sgolds]

jhalada, don't forget that large numbers of wafers will be needed to build inventory for Athlon64 for end of year sales. Meanwhile, Barton will still command the bulk of AMD sales this year. Of course, we still have legacy processors being produced (TBred-B at least, others?). I don't have any numbers to make a reasonable estimate of how many wafers will be needed for each processor but I am having a hard time believing that AMD will be able to produce enough Opterons this year to be market constrained.

However, I do note that IBM does not have its server product ready yet and has not committed to a ship date. So the others will have more supply than I had presumed.

[economaniac]

Joe re" Even at fairly low yield of 50 good die per quarter,"

now you are just encouraging elmer.

Capacity is an interesting issue for AMD. They have plenty of capacity for the server market, and that market is relatively insensitive to processor price since other costs (especially software) are so high. They are forever short of capacity for value processors, where price/performance determines whether a product sells tens of millions or none at all. If they could sell 12 million desktop and mobile chips per quarter they would break even with ASP around $50. Selling 6 million they need over $80 ASP. At the higher prices it is much harder to get even the smaller volume of sales. It is largely AMDs ability to make enough chips that determines how aggressively they can price. Curiously they are more vulnerable to inventory corrections when they have limited product as well. At 5-6 milliion per quarter they need to maintain ASPs in order to survive, and they have too few chips to really benefit from aggressive pricing to gain share. With more output they can price as low as necessary to clear output.

E