Rolling in dough??? The numbers don't lie.
AMD's cash position has fallen from about $1.3B to $.9B in just 9 months. It will fall again given that their forecast Q4 loss will be about the same as their Q3 loss. (Intel's cash has fallen by the same percentage but that's attributable to stock buybacks and Intel still has $9.0B in the bank.)
AMD may get back to profitability in Q2'02 assuming the CPU recovery is for real but by that time they'll probably only have $.6-.7B in cash reserves. That may sound like a lot but it costs about $.5- 1.0B to re-tool just one fab. AMD is not as diversified as Intel. CPU's and Flash are everything to AMD and Flash hasn't shown any signs of picking up as yet.
AMD is underpricing it's Athlon XP's relative to it's value in the marketplace. They must edge prices up and get to 2Ghz in the 1H. Executing on their roadmap must be flawless and they have no margin for error. ('01 was a good year for AMD's roadmap, '02 will be a better year for the Intel roadmap due to Intel's lead with .13 micron). AMD must do it in an environment of significant cost cutting. They also have to start making some inroads into the commercial space ASAP. (Hammer in '03 may be too late assuming '02 is a recovery year for the industry). They also better pray that the flash business picks up soon. And last but not least, they need to win a big name OEM like Dell, Gateway, IBM, Compaq, or HP. (Joe's no name computer shop won't cut it) They also better hope that there are a few typical Intel fumbles along the way. (that's always a sure bet!!)
AMD has always been the "comeback kid". This time might be their last chance.
They also better beg Jerry to stay on for one more year. Jerry might be able to pull it off. Jerry can charm the socks off employees, analysts, shareholders, etc. Ruiz has big shoes to fill and I doubt he can pull it off alone.
Where am I wrong????
<< These rumours pop up from time to time, in fact many times IBM was said to be the buyer. I just ignore them.
AMD is far from a desparate position, in fact as soon as the Flash memory market firms up AMD will be rolling in dough. They have cut costs, firmed up cpu prices, and continue to sell cpu's in near or greater than record numbers. On the flipside we have rumoured P4 shortages and strangely enough price cuts on those same "in short supply" products. Intel has even been dropping prices on unreleased products! Something seems out of whack with recent Intel rumours/news. >>