Interesting AMD Conference Call
 

Hector
with less than 10% of the resource of Intel we have innovated ahead
we can very efficiently ramp to new yields, 90nm is an example
powernow, hypertransport, direct connect architecture, amd64 only one with multicore in mind with design
amd will keynote national association of broadcasters
opteron 2nd anniversary

90nm progress? 65nm?
We have a plan to change wafer starts by the end of Q2 for 90nm. We were ahead on yields and transistion to 90nm. Just a few more weeks and we are 100% 90nm. 65nm work is jointly with IBM. we expect early of Fab 36 we will be building 65nm product. more clarity later in the year.

opteron revenue or volume? losses with personal connectivity business?
we group revenue and units double digits sequentially. volume the key issue with personal connectivity business in the PIC area. we are comfortable with the level of investment we have at this point.

operating margin and cpg, down 13% here. is it mix or pricing?
we are building fab 36. pure startup costs.

fab 30 use?
we will use fab 30 for a long time with minor expenses, expect to get 10 years out of fab 30.

dual core introduction talk, can you give amd's perspective on how important dual core is in 2005 for server and desktop? pros and con of the approaches from amd and intel?
decided to put emphasis in the server market because that is the one that is ready to exploit this new technology. there will need to be additional optimization in the client space. clearly the server space has immediate usage and benefits now. desktop/client space we don't see single core performance being dethroned by dual core till software supports it. you can take a car and put two 4 cylinder engines on it, but it does not make it a V8. intel has slapped two cores together on a bus that does not have enough bandwidth for one CPU.

90nm vs 130 nm numbers for Q1?
12 week cycle time, as we close out q1, bulk of output in q3 is 90

mix richer in the quarter, but gross margins down a bit sequentially. larger amd64 die tradeoff, and full leverage has not blown through for 90nm?
more to come next two quarters of 90nm

so gross margins could expand next quarter as transition to 90nm improves?
yes

flash in 1st quarter, do you have a % for mirror bit?
same range, double digits as last couple of quarters

turion expectations?
should look at q2 as quarter to see it in the market with q3 and 4 accelerating volume.

on the shape of the year, and margin progressions, how should we think of the margin progressing in CPG as costs from Fab36?
costs will increase for Fab36, we will see full benefits from 90nm conversion however, so balance between both sides of the equation.

the goal in the IPO is that you will IPO a percentage of spansion?
we will do the initial IPO for the appropriate structure to capitalize the business, amd will be the major shareholder. we will not consolidate the business. consolidation will not be allowed. will be a minority interest line.

expecting marketshare games in japan.

dual core side, pricing from intel, how is your pricing?
dual core brings value to enterprise and server space. significant premium for performance in the server environment. need to wait till the software ecosystem is ready for client side.

10% of the resources, made a number of shifts, can you survive at the 10% or do you want to expand that?
it is always our goal to expand, so long as we are in a competitive market we are confidant that we will out innovate our competition.

sempron and athlon 64 pc mix q4 to q1, will new product support pci express, powernow, ddr2?
increase in amd64 overall, athlon 64 grew faster than sempron, pci express is available today across all variations, mobile, desktop, and server. direct connect architecture means we don't need ddr2, we have a planned transition to ddr2 in 2006. working with customers for that when finally that provides superior performance. we will continue to lead in performance with ddr1.

turion chipset partners?
usually partners, ati, nvidia, via, sis and others. broadcom, atheros and others. usual partners on amd platforms.

open platform strategy vs competitors closed approach.
lot of technology platform changes. it is our duty to offer our customers the choice of best in class in each categories. in the forseeable future customers will have an opportunity to select the platform for best in class components not only in the cpus, but also for components.

turion ramp and asps?
it is a little early. in the market in q2. acceptance from oems, fastest design win in the mobile space. we expect to see an increase in share.

100% 64 bit at some point?
by the end of year nearly 100% amd64.

what kind of impact that would have on gross margins? target mix for athlon 64 and sempron?
mix of mobile increasing as is server, will continue to outpace growth. leads to improved utilization of factory and technology, and our strength in the market leads to improved margins.

competitors dual core is 80% larger. relative to that is your dual core above or below that?
our die size is smaller than our competitor. two processors glued on one chip, not true dual core. our single core processor will keep our performance lead.

i'm an fx55 user
thank you for your confidence.

IPO this quarter?
good try

normalized gross margin on CPU business, range?
55ish normal, 54% today is normal. depends on mix shipped can move it around. our goal is north of 60%.

300mm ramp comments?
factory build has occurred on schedule and budget, running silicon this quarter. prototypes towards the end of the year, production first half of next year.

inventory mix from flash and CPUs?
we don't give that granularity, slowed flash production down, have a little bit more flash side than CPU side

do you have any goals for maximum level of debt of minimum level of cash over the next year?
not ready to talk about that yet. we think debt to capital ratio should be 20%. we are targeting that.

amd is not selling any of its portion of spansion? cash proceeds are for spansion?
yes, for spansion.

operating margins in CPG if you back out spansion?
don't want to go there.

product shortages from competitor, healthier market explain CPG margin improvements?
we believe that it is significantly higher than the market growth. our products are allowing us to win more share.

how would you characterize pc market desktop vs mobile?
healthy market, q1 was very linear, q2 more backend loaded. we have two growth engines, servers and high growth market. large portion in high growth market, like india, china, russia. seasonality is less effective than in the mature markets of europe or north america.

strength of china continues in q2?
absolutely.

cost structure color of amd once the ipo is completed?
too premature to answer that kind of question, there is so much info in the s1 that we have to execute to.

color on desktop business as a whole for Q1?
we had an asp increase, that was lead by the desktop business. very strong in the channel.

taxes?
we are in the 10% range.

market opportunity for x86 in embedded and consumer markets?
strong desire for people in the industrial market to exploit the benefits that opteron has as an embedded market. we think we deserve a big chunk of that market. much lower cost, power, smaller footprint in the consumer electronic market. we believe digital convergence gives us a great opportunity to expand our footprint. amd seen as a friendly partnership company in that space.

sempron vs athlon 64 markets?
we address different markets, and we will move to 64 bit for all CPUs. you should expect the entire line of CPUs from AMD will be 64 bit enabled.

before the end of this year?
most likely.

will you be shipping material volumes of desktop and notebook dual core this year?
yes

q2 inventory, still slowing down fabs? target later on in the year?
can not comment on flash. we build to market demand in CPUs. we are executing quite well, so we are bringing on additional capacity to service that market.

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