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AMD Earnings Conference Call Summary
Date: Thursday April 13, 2000
Category: Press Release
Manufacturer Link: AMD Discus -- BBS
A summary of the April 12, 2000 AMD earnings conference call.
 
Jerry Sanders and Q&A Session


Jerry Sanders, CEO of AMD on CPUs

  • Consumer PC sector was strong world wide
  • shipped nearly 6.5 million CPUs
  • Improved both profitability and market share
  • Record February market share in excess of 65%
  • K6-X sales in excess of 5 million units
  • K6-X asps nearly the same as in Q4 99
  • Athlon sales exceeded 1.2 million units
  • blended asp increased 10% over Q4 99
  • K6-X demand remains surprisingly strong
  • Trying to increase K6-X output over the projected 4 million units for Q2
  • Q2 asp flat for K6-X
  • 50% growth for the Athlon to estimated 1.8 million units for Q2
  • Unit shipment and asps should be higher for the Athlon in Q2, 90's range for asp
  • Athlon is clearly a home run
  • On-die L2 cache Athlons will be a grand slam
  • Thunderbird and Spitfire are sampling
  • Spitfire and Thunderbird will be performance leaders clock per clock
  • Will retain MHz lead
  • Spitfire and T-Bird will ship in volume from Dresden in June
  • Initial Thunderbirds will be Slot A as to be compatible with current platform
  • Socket A T-bird will follow in Q3
  • Spitfire from Fab 25 (Austin) will generate revenue in June
  • All Spitfire will be Socket A
  • 2nd half 2000 product line will be competitive
  • On-die L2 Athlons will ramp aggressively in Austin and Dresden
  • Expect PC growth in the high teens for 2000

Question and answer session

  • Estimated 25 million CPU units this year.  This is a conservative effort.  Athlon should be more than half of the total.
  • Expecting 100 asp in the second half.
  • 15-18% range operating margin currently.
  • Expect enterprise market penetration to be higher in Q2
  • Meeting commitments with customers, improved image.
  • Target of more than half of the Athlons from Dresden.
  • Will accelerate unit growth from 50% to 100% 2nd quarter for Athlon
  • Shipping in June from Dresden for revenues
  • 5-10% of Athlons from Dresden in Q2
  • Depreciation expense in Dresden for Q 2 $14 million
  • $28 million in expenses for Q2 from Dresden
  • Dresden will become profitably in Q3
  • 850MHz currently shipping in enormous volume
  • 900,950, 1000MHz shipped in 10s of thousands for Q1
  • 900, 950, 1000MHz will ship in 100s of thousands for Q2
  • On track for 1.5GHz for January 2000, will move to it smoothly
  • Dual chipset Q4 (770)
  • Dresden has full capacity of 5000 wafer starts per week
  • Dresden currently 600 wafer starts per week, recently up from 500
  • Dresden full capacity by the end of 2001
  • May add third megafab for flash
  • 3rd fab would start with 8 inch wafers but would be 12 inch capable, Fujitsu would be the partner
  • AMD expects the market for cell phones to be over 400 million
  • They are producing as much flash as they can, but are still losing market share
  • No current plans to produce flash in Dresden
  • K6-2s are sold out for Q2
  • K6-X+ clock speeds will be increased for mobile market
  • Not relying on K6-2 for revenue
  • Flash growth is capacity driven
  • Projecting 10% flash growth, could double that
  • Fab 25 (Austin) will continue to produce Athlons, Spitfire and Thunderbirds
  • Thunderbirds will be the only CPU made in Dresden (Fab 30)
  • Austin will produce large volumes of Spitfires
  • Desktop CPUs make up 85% of units, Notebook make up 15%
  • Mobile Athlon by the end of 2000
  • 30% processor market goal is still 21 months away and not yet subject to revision
  • Not worried about *ntel price cuts, the market is strong, *ntel is having high end supply problems
  • Via KX133 and AMD 750 are the chipsets relied on now, do not see a shortage problem
  • ALi and Sis should have chipsets in the 2nd half which will help with future needs
  • Current chipset supply is good
  • Every major PC supplier except *ell uses Athlons
  • AMD is working diligently with *ell
  • The Thunderbird and Spitfire core are the same.  The only differences is the L2 cache size
  • Thunderbirds from Austin will be Aluminum
  • Many recently announced flash contracts are cash binding
  • Expect more flash contract announcements in the next 6-9 months
  • Socket A Thunderbird and Spitfire costs will be substantially less than current Athlons
  • Communications group is doing well, they will keep the network product division and sell the rest
  • Details of Communications group sale will be announced end of Q2
  • Currently shipping millions of dollars of DSL devices, demand is curving upwards
  • Will be able to use full available Fab 30 output for this year
  • May or may not add a partner for Fab 30 in the future (2001)
  • No longer need a partner for Fab 30 as startup costs will be fully absorbed Q2
  • Thunderbird and Spitfire die size have not been released publicly
  • Object for Q2 is to grow revenue enough to absorb Dresden startup costs
  • Motherboards supplies are not an issue, there is good support, many companies are working on Socket A boards
  • AMD is looking into internet appliances if the proper vehicle for them arrives.  The X-Box was too costly.
  • Dresden could contribute to revenues in Q3
  • AMD may or may not pay down their debt this year.
  • They do not see any competition from anyone but *ntel and believe that in a 25 billion dollar market there is enough room for 2 competitors.

Well it was an incredibly informative and positive conference call for AMD.  This is not something we have grown used to the past few years.  There is so much info here to talk about that I will not even begin to discuss it here.  I suggest using this BBS thread I've created to talk about the call.

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   11 / 21 / 2019 | 12:39AM
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