INTC vs AMD
Some existing data from yahoo.com:
AMD:
Profitability
Profit Margin (ttm): 6.17%
Operating Margin (ttm): 9.27%
Balance Sheet
Total Cash (mrq): 2.63B
Total Cash Per Share (mrq): 5.438
Total Debt (mrq): 658.28M
INTC:
Profitability
Profit Margin (ttm): 20.46%
Operating Margin (ttm): 28.48%
Balance Sheet
Total Cash (mrq): 9.12B
Total Cash Per Share (mrq): 1.568
Total Debt (mrq): 2.26B
1) Let's see. General price cut is 30%, AMD has to follow about the same percentage. Where are they going?
INTC:
Operating Margin (ttm): ~20%
AMD:
Operating Margin (ttm): ~6.5%
Then for AMD Profit Margin (ttm): 6.17% when 9.27%, where should it be now?
~6.5% - (9.27% - 6.17%) = ~3.5%
2) last time when AMD did the secondary offering, it had $1B in debt and about $1.5B in cash. If AMD still needs to grow (it must!), how can it do?
This is a general analysis.
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INTC Operating Margin is 3 times of AMD
28.48% vs 9.27%
If a 30% cut doesn't work as expected by INTC, it will do another round.
How can AMD survive?
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对INTC & AMD想提醒一点
AMD cap $13B
INTC cash $9B (账面上)
market share: 85% vs 15%
差距实在太大。
价格战是最有效的方法。
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我做股票大多是TA，做FA并follow的只有有限的几个，其中包括INTC & AMD。
长线看INTC在18个月内会回到$25.理由包括FA还有GM目前的story.
长线还加上目前的短线，不看好AMD。
AMD很可能最近几个月还会做secondary offering.
我没有任何INTC or AMD position.
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我觉得AMD现金流可能支撑不住了.
所以，我问你那个问题：价格战下AMD怎样盘活现金流？
如果果真AMD做secondary offering，消息发布大概一个多月后，看TA情况，我会long AMD.因为，主力用secondary offering shares cover shorts.利空尽后是利多。
这是我对AMD的玩法。
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“ 一是 ６４－BIT， AMD 的所有现有产品都是 ６４－BIT， 也就是 VISTA READY 的。INTC 的大多现有产品不支持 ６４位。”
这个没错。但64BIT现在还没有多大市场，因为操作系统还没有出来。
“二是 服务器CPU。 尽管INTC 把它们的新一代服务器CPU 吹上天， 可这个不一样， 那些需要大量服务器的用户（如 GOOGLE） 都会自己在采购前测试。”
Itanium会跟VISTA服务器版同时发布。在这点上，Itanium会有优势，因为Itanium是舍弃了现在的老路（AMD64用的）专为服务器开发的。
既然要测试，在测试结果还没有出来前，不能说AMD 服务器CPU是王牌。
实际上AMD唯一的优势是在64 bit PC上，在这方面，INTC的过渡产品没有跟上来。但这个不是INTC的着眼点，因为PC 32 bit计算能力已经过剩。
“最后生产同样产品， AMD的成本比INTEL的低。”
No.
INTEL的成本比的AMD低得多。这就是规模效益。要不AMD会主动开打价格战了。
INTEL的这次价格战可能会使AMD的两条刚投入的新生产线在还没有收回成本时就要被新技术淘汰。
觉得对于这次价格战AMD怎么盘活现金流？
具体的操作对象，比如芯片技术，只是技术，只是一个marketing的载体罢了。
公司的生存和发展，靠的还是marketing and then sales.
柯达彩卷在中国一直是赔钱在卖，目的就是先击败可怜的乐凯，然后垄断市场。Windows卖的便宜，但所有其他Microsoft application都卖的贵，但实际上Windows才是Microsoft的灵魂。道理一样。
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Microsoft Office revenue is bigger than Microsoft Windows revenue while units sold are much less. So relatively, Windows is cheaper.
It's true that 64bit windows server OS is the one yet to come, but this one accounts for the biggest market share.
Agree that high-end server business is more profitable. Also, high-end server business must update from time to time. While PC side, it's almost saturated and the update is very slow. Microsoft just decided not to support Win98 any more in order to force Win98 PC users to buy the latest version.
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是否觉得GROSS MARGIN高的应主动开打价格战？
If not, we are not on the same page. This is fundamental.
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INTC ER会增加，margin降低
AMD margin降低更多，盈利会成问题。
OEM已经调整了进货INTC/AMD比例.这表明，INTC从产品环节已经弄回了部分市场份额。但对INTC本身，利润不会增加太多。
下一步，发货后，OEM会根据实际用户的反应调整进货INTC/AMD比例。否则，OEM自己也会incur write-off.
85%->90+% doesn't mean much for INTC.
But for AMD, from 15%->10-%, it's fatal given its much lower gross profit margin.
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Gross operating margin of INTC will go down in the next year. This is just the simple pure fact. But this doesn't necessariely mean the stock price will go lower because the revenue will be up. The revenue surge up is because the price-cutting drives old PC users to give up old ones and buy new ones. This is a big potential market that high price new product can't explore.
BTW, do you believe stock prices of INTC or MSFT have anything to do with their profit? Before you say yes, check the story of GM.
When INTC beats up AMD in the short term by this price cutting battle, it can monopoly the market again in the next 2 years when newer chips roll out. At that time, it will get higher profit margin with even newer products.
Then this game goes over and over.
What's wrong with that?
Gross operating margin of AMD will go even much lower. It may not be able to generate positive cash flow to support its expansion which it has to do. Where to get the necessary money? Is it cheap to get money from WS? Who are the real bosses of AMD? Check the major holders please. The major holders control the whole game of AMD. AMD, as a company, may lose money dearly. But the major holders of AMD are sure to make big bucks from the open market!
AMD beats INTC?
$13B cap vs $9B cash reserve?
Please think about it. This is the point I want to make.
Hope is the very enemy for hopers.
