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To: niceguy767 who wrote (187712)2/19/2006 11:11:57 AM
From: Biomaven
of 273401
 
If there is such a thing as a slam dunk, AMD's lawsuit is just that from my vantage point. Any settlement in this lawsuit will likely mitigate greatly any Fab 36 costing concerns that any have, assuming, of course, that any such costing concerns are grounds for concern. But in the off chance that a healthy settlement isn't granted by the court

I suggest you start watching the current (excellent) PBS show "Bleak House" to get a more realistic idea of the timing of any definitive decision in the antitrust suit. <g>

Peter

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To: Sarmad Y. Hermiz who wrote (187716)2/19/2006 11:22:04 AM
From: niceguy767
of 273401
 
"For my disclosure, I bought intel shares after it dropped to 22, thinking it will fill the gap up to 25 or 26 when the dust clears."

Appreciate your providing siclosure.


"One puzzling thing in AMD's balance sheet is that, in q4, plant and equipment (PPE) dropped from $4.3B to $2.7B, even though AMD spent several hundred millions on fab 36. I know that AMD transferred assets to Spansion. The spansion investment is valued at $720m. So where did the remaining $800m go ? "

Been a long time since I studied accounting, but prior to spinoff, SPSN was characterized as a Minority Interest, in which case, I'm assuming that all SPSN plant was on AMD's books. I also notice that SPSN's plant now records PPE at $1.6B, and as you point out AMD's is now lower by same, which probably explains the missing $800M.

"My guess is that fab 36 will have high base costs, and products from it (if sold at current ASP) will have much lower gross margin than currently achieved from fab 30. But this only an uninformed guess, and I am hoping discussion here can improve it into an educated guess."

Hard call here. Obviously depreciation costs increase as Fab 36 is brought on stream, but so also do margins improve immensely as the shift to 65nm takes place. Given accelerating demand for AMD Opteron-family product, I'm guessing that breakeven production out of Fab 36 occurs much sooner than later.

I'm thinking that Mr. Rivet will choose a depreciation schedule that will match the expected ramp of Fab 36 so as not to impair the overall operating profit range currently 20% to 25% and improving to 30% after about 1 year of Fab 36 production.

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To: Biomaven who wrote (187718)2/19/2006 11:35:49 AM
From: niceguy767
of 273401
 
"I suggest you start watching the current (excellent) PBS show "Bleak House" to get a more realistic idea of the timing of any definitive decision in the antitrust suit. <g>"

No doubt the lawsuit will take longer to resolution than many anticipate, but again, of the many lawsuits I've read (at least 1/week) AMD's is the most "definitive" of any. But who knows what lurks ahead?

I'll keep an eye out for "Bleak House". Perhaps I'll need that HP analog card Express Card TV tuner/PVR with MCE Remote on a new laptop (HP's dv8140us) to grab it though ;-)

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To: niceguy767 who wrote (187719)2/19/2006 11:55:04 AM
From: neolib
of 273401
 
Hard call here. Obviously depreciation costs increase as Fab 36 is brought on stream, but so also do margins improve immensely as the shift to 65nm takes place. Given accelerating demand for AMD Opteron-family product, I'm guessing that breakeven production out of Fab 36 occurs much sooner than later.

Is there a significant cost improvement just from 300mm vs 200mm even at the same 90nm, I mean in addition to the well know edge effect?

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To: eracer who wrote (187711)2/19/2006 12:55:54 PM
From: dougSF30
of 273401
 
Yeah, if only it weren't already scheduled for June due to nVidia, as of last November.

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To: Biomaven who wrote (187718)2/19/2006 1:34:56 PM
From: j3pflynn
of 273401
 
Peter - The definitive decision is relatively unimportant re: AMD's success or purposes. Forcing Intel to "keep its nose clean" under the bright lights of close regulatory inspection is what's needed to allow a relatively level playing field, which is AMD's main goal. As long as they can keep the light shining on the situation until they're strong enough to garner the same sort of consideration from customers that Intel gets, the lawsuit will have served its purpose.

Any judgement in AMD's favor that comes as a result is just icing on the cake.

Paul

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To: neolib who wrote (187721)2/19/2006 2:32:00 PM
From: niceguy767
of 273401
 
"Is there a significant cost improvement just from 300mm vs 200mm even at the same 90nm, I mean in addition to the well know edge effect?"

I don't know. I'm guessing it's all about yields and if Fab36 yields approach Fab 30's reasonably quickly, other cost considerations can be readily absorbed without negatively impacting the 20% to 25% operating margins currently being achieved.

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To: j3pflynn who wrote (187723)2/19/2006 2:43:09 PM
From: Biomaven
of 273401
 
Any judgement in AMD's favor that comes as a result is just icing on the cake.

I completely agree with you. Just pointing out to Niceguy that it's going to be quite a while (think years, not months) before we get to eat any icing.

I do think AMD will ultimately prevail in the suit, but I don't think the suit is going to be a significant driver of AMD's stock price (except, as you point out, that it continues to make Intel behave) in the short run. On exception might be if discovery reaveals any "smoking guns" - but I suspect that Intel was too sophisticated for that.

Peter

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To: Biomaven who wrote (187725)2/19/2006 3:08:27 PM
From: j3pflynn
of 273401
 
Peter - re: "...exception might be if discovery reaveals any "smoking guns" - but I suspect that Intel was too sophisticated for that.
"


No doubt true.

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To: j3pflynn who wrote (187726)2/19/2006 4:22:55 PM
From: Sidney Street
of 273401
 
Intel Lawsuit

Intel as a corporation may have been smart enough to avoid creating smoking guns, but we've seen countless examples of email tripping up people who should know better. Some of the good evidence is out of INTC hands; hard to know how forthcoming INTC's customers will be in producing it.

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