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Once I thought that AMD has inventory problem, but...

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June 1, 2007 3:44:23 PM

I recall that AMD had no inventory in Q306 or something that led to channel problems and Intel had "a quarter's worth".

http://seekingalpha.com/article/18646
Quote:
inventories at the current level are less than one quarter's cost of sales


(90 days)

http://seekingalpha.com/article/24326
Quote:
On the inventory, in the past it has trended between sort of 60 to 70 days, and it looks like we are going to set the bottom here around 75 to 80 days, and it was up to 100 days. Do you feel comfortable with this 80 to 100 day new range of inventory, or do we expect to look at a different range next year?
June 1, 2007 3:57:02 PM

Quote:
I recall that AMD had no inventory in Q306 or something that led to channel problems and Intel had "a quarter's worth".


From the same table, AMD had about 34 days of inventory at the end of 06Q3...
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June 1, 2007 4:07:47 PM

This is a flawed analysis. DSI will be tight if you're giving away products on the cheap...
June 1, 2007 4:30:08 PM

By "no" inventory, of course I mean little inventory and I'm not seeing where the 42.6/54.9 come from.
June 1, 2007 4:37:03 PM

Quote:
By "no" inventory, of course I mean little inventory and I'm not seeing where the 42.6/54.9 come from.


I may have calculated them wrongly. :roll:
a c 96 à CPUs
a b À AMD
June 1, 2007 4:37:30 PM

. . . . in the case of AMD / Intel.

Chipzilla may be building up inventory in anticipation of summer price cuts or planned Fab summer maintenance(?).

AMD would certainly be reducing DSI with 939 EOL, a lean inventory strategy due to cash flow and possibly the binning of Barcelona in anticipation of a late Q2 - early Q3 launch . . .
June 1, 2007 4:57:24 PM

Quote:
. . . . in the case of AMD / Intel.

Chipzilla may be building up inventory in anticipation of summer price cuts or planned Fab summer maintenance(?).

AMD would certainly be reducing DSI with 939 EOL, a lean inventory strategy due to cash flow and possibly the binning of Barcelona in anticipation of a late Q2 - early Q3 launch . . .
Judging by Dell's recent layoff notices,and ongoing troubles, sales are likely dropping there as well....which would leave AMD with excess inventory....no? :?
June 1, 2007 5:03:11 PM

Quote:
. . . . in the case of AMD / Intel.

Chipzilla may be building up inventory in anticipation of summer price cuts or planned Fab summer maintenance(?).

AMD would certainly be reducing DSI with 939 EOL, a lean inventory strategy due to cash flow and possibly the binning of Barcelona in anticipation of a late Q2 - early Q3 launch . . .
Judging by Dell's recent layoff notices,and ongoing troubles, sales are likely dropping there as well....which would leave AMD with excess inventory....no? :?

Correct me if I'm wrong, but the revenue number surpassed guidance. Plus, if they are slashing margins to compete with HP (plus the walmart deal)... more units sold... but at lower prices & margins. If Dell can sell more dirt cheap AMD systems to prop up margins (Dells'), they'll do it.

You have to wonder what AMD is actually making on these chips though, I think a hotdog cart in New York City could turn more of a profit per unit sold. :wink:
June 1, 2007 5:21:55 PM

As TS gives some details, companies today may cut workers not only when losing money, but even just because they think their profit margins are not big enough (or not rising enough, even if quite big!).
June 1, 2007 5:26:56 PM

It's chancy to guess at profits per chip. There are so many types of costs, and some of them are firmly in the past. That's why I want to know what I refer to as the marginal cost of production. That is, how much does it cost to manufacture 1000 extra chips of a certain kind. This is a certain measure which does mean something, even though it isn't decisive. If I can sell a chip for $70 that has a marginal cost of $20, I may be doing so-so or even needing improvement as soon as I can, but....at least in the meanwhile I'm having that revenue and I'd be worse if I didn't get at least that $50 per chip, etc.
a c 96 à CPUs
a b À AMD
June 1, 2007 5:32:48 PM

Quote:
. . . . in the case of AMD / Intel.

Chipzilla may be building up inventory in anticipation of summer price cuts or planned Fab summer maintenance(?).

AMD would certainly be reducing DSI with 939 EOL, a lean inventory strategy due to cash flow and possibly the binning of Barcelona in anticipation of a late Q2 - early Q3 launch . . .
Judging by Dell's recent layoff notices,and ongoing troubles, sales are likely dropping there as well....which would leave AMD with excess inventory....no? :?I think the point of the article was that AMD was well positioned with its inventory and its possible ability to ramp-up production and expand margins.

Dell? Sheesshhhh . . .Yah gotta wonder what's going on over there . . . They seem to be flying high but getting pounded from multiple directions from shareholder lawsuits, fed investigations, etc

From Febuary:
Dell and Intel sued, possibly over business as usual

Quote:
Dell was famously an Intel-only shop until recently, when it began selling AMD-based machines. Some pundits have noted that Dell only began shipping AMD systems following AMD filing its lawsuit against Intel last June.

AMD's suit against Intel involves a huge amount of discovery documentation, unprecedented in US legal history. As such, the case is not expected to go to trial until 2009.

However, Dell is not the only OEM to have a history of buying chips exclusively from Intel, Kay said. Toshiba Corp has long been an Intel-only OEM, and continues to be. "But they're not already bleeding from multiple wounds" like Dell, he said.


I only point this out because Toshiba has recently partnered-up with AMD. It's like a soap opera out there . . . :roll:
June 1, 2007 5:40:39 PM

The last supports for the Intel "monopoly" are being taken out, so that now Intel could have a monopoly only thru consumer choice.
!