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Thursday, September 07, 2006

Calls of Note Part 4

- JP Morgan notes they have been tracking PC specifications at the two largest PC OEMs, Dell
and HP (combined roughly 34% of global PC units) on component configurations of notebook, desktop, workstations and servers to analyze trends for INTC, AMD, NVDA and ATYT.

ased on our proprietary model, they estimate Intel's (NASDAQ:INTC) average share of OEM PCs fell from 86% in April to 81% in August, driven by share loss in HP notebook and desktop PCs to AMD. HP
notebooks with AMD processors rose from 6 out of 25 in April to 11 out of 29 in August due to increased adoption of AMD's Sempron and Turion notebook processors.

In general, OEM trends appear to be incrementally favorable for AMD. Firm believes some of AMD's traction may be seasonal as most of the company's share gains were in the consumer segment, which is the largest segment for AMD. Checks also indicate Intel is gaining some market share in the channel (roughly 40% of the PC market) due to aggressive pricing. Nevertheless, AMD's increased penetration at HP casts doubt on their belief in Intel share gains during 2H06. In addition, the survey does not account for future AMD offerings at Dell, which should be in the market in 4Q06 and increase AMD's share.

While they are positive on recent capex cuts, they remain concerned about Intel's record inventory, sluggish PC demand, and aggressive guidance.

Notablecalls: I have just one thing to say - cash in those chips!

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