Advanced Micro Devices: Will Somebody Please Stage an Intervention? Posted on Feb 21st, 2007 with stocks: AMD http://chip.seekingalpha.com/article/27658 William Trent submits: Just a few short months ago it seemed that Advanced Micro Devices (AMD) was going to steal Intelâs (INTC) lunch money. Now that Intel has beaten up AMD with a price club and is eating its lunch, things are really getting ugly: Advanced Micro Devices, embroiled in a brutal price war with Intel, will need to raise money within the next six months, according to Doug Freedman, an analyst with American Technology Research. From taking market share to running out of cash in less than one year⦠amazing. Perhaps not surprisingly, the industry mavens at Semiconductor Fabtech (whose customers really donât want to believe semi capex will be cut) are more sanguine. Excerpts from Semiconductor Fabtech Is a CapEx crunch at AMD brewing? : I also noted Mike Splinter of Applied Materials, during a conference call yesterday, clearly state that he expects both AMD and Intel to meet current CapEx plans this year. This point shouldnât be overlooked as Applied has spent a lot of time with both of these customers, checking on purchase requirements for this year.The vibes picked up over AMDâs spending plans indicate at the moment that orders for Fab 36 and Fab 38 are being placed, but also that AMD is getting very tough on prices and contract deals - even delayed payments! That last point is a bit scary and adds to the cash problem rumours, but CapEx overall doesnât seem to be affectedâ¦. If CapEx is cut, we would expect this to happen later in the year rather than now, and if AMD does go back to the market to raise more funds, then CapEx could be saved anyway. Even before the price battle with Intel started and AMD forked out for ATI, it was going to be tough for AMD to fund this high level of CapEx this year. There seems little doubt that itâs tougher now but few real signs that CapEx will be cut. Will somebody please stage an intervention?
I have a friend working at AMD, there is a brand new product in the pipeline that will ROCK , can't say more.
Intel is the one that announced a breakthrough with non-silica manufacturing and the thinnest nanometer yet. And even they are getting hammered. There's a massive glut in chipland. Taiwan Semiconductor's CEO has expressly said it's the biggest glut ever. AMD could easily sink to the $10 range or go lower, depending on how bad their cash crunch is. Their untimely purchase of ATI (at a high) was foolish beyond belief.
Yes, it may drop substantially from here (even below 10). But more important are the numerous opportunities to profit off this stock that will be created in the interim.
AMD will slowly make its way into the single digits, at that time I would be a huge buyer, this company will come back stronger, however not anytime soon.