AG>Hi Lynn,
-=> On 22 Mar 98  00:06:00 Lynn Nash said to Jonathan Michaels <=-
 LN> K6 is from AMD by the way.  It is a very good chip but I worry if AMD
 LN> can hold the line.  They just reported again, for another quarter,
 LN> that they are still losing money on each chip that they ship, due
 LN> of manufacturing yield problems.  Their bail out deal for IBM to make
 LN> chips for them is still months away.  Intel on the otherhand says
 LN> their yields are better than planned.  Seeing blood, Intel has
 LN> announced a 20 percent price decrease on most of their chips.  If AMD
 LN> has to reduce their prices another 20 percent and they are losing
 LN> money at the current levels, big trouble is brewing for them.  It is
 LN> already bad enough that their credit rating was lowered last week.
AG>
AG>However, AMD are major manufacturers of other types of chip than just
AG>CPUs, like EPROM, memory drivers, buffers, drivers, gates and PALs.
AG>They are often the preferred supplier of these parts, on grounds of
AG>quality.
Yep, I used to design with their line for years, all the way back to
their 2901 bit slices. They always made solid products. Can't say I
cared much for those early versions of PALASM though.
AG>They may well be capable of sustaining a loss indefinitely on CPUs if they
AG>want. (Perhaps retaining the product to keep their chip designers in the
AG>leading edge).
No, they said six months ago that they could no longer support the
corporation on sales of their other products alone. I think that they
have only had one profitable quarter in the last 5. They currently have
a 400 million loan coming due and have indicated that they would have to
go out and secure some more cash.  That kind of double talk really
sounds like using one credit card to pay the bill on the other to me.
That is why their lowered credit rating was a concern to the market,
because the cost of money would be higher for them.  Their stock
rebounded some in the last couple of weeks on the news that yields had
improved and the new deals with with Compaq and IBM.  The market is
hoping that they can get by this in a few more quarters.  While the
current financial situation is kind of grim they are denying insider
rumors that they are looking to sell a 25 percent stake in the company.
Serious rumors like that normally only surface if at least the idea was
quietly floated by someone.  The same thing happened with DEC before
they started their massive asset sell off.
AG>Having said that, I have no idea what proportion of their turnover
AG>derives from which product.  I just specify their PALs at work.
I imagine that is a market where they are still the intel of the bunch.
--Lynn
 * SLMR 2.1a * The elephant is the only animal with four knees.
--- DB 1.39/004485
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