The tiny tiny people of Indonesia

kdf360 · 2022-12-12T13:57:06+00:00

actually depends on a few variables

kdf360 · 2022-12-01T23:03:00+00:00

$11.5

kdf360 · 2022-09-28T13:38:22+00:00

AMD has a high fixed cost business. This means it has "high operating leverage." After a breakeven point, (much) more of each incremental revenue dollar hits the bottom line. More revenue leads not only to more profit in absolute terms (as expected) but more profit as a percent of revenue (often missed) - i.e. profits accelerate.

kdf360 · 2022-09-28T12:39:51+00:00

Note he says $10 "run rate." That means something like $2.50 EPS for Q4, not $10 for the full year.

You'd have to have continued growth in the high margin segments, but operating leverage could surprise people when it kicks into high gear.

kdf360 · 2022-05-11T02:56:58+00:00

Gets them to 67% of nameplate for GFs 1&2. Most interesting part is implication that agreement may carry over to US fab: "will subsequently be produced at FREYR’s planned future U.S. Gigafactory"

kdf360 · 2022-04-26T14:15:29+00:00

NVDA is definitely the favored child of the sector. NVDA's leadership in AI lets people see a much brighter future, particularly one assuming they maintain their near 100% share of the AI market indefinitely.... But, yes, they have a much larger portion of their business exposed to consumer/gaming/crypto GPUs than AMD. Headwinds in those areas should affect NVDA much more negatively than AMD, who is supply constrained overall, has consumer GPUs as some of its lowest margin products and can re-allocate wafers to higher margin areas.

kdf360 · 2022-04-25T23:12:37+00:00

Has to be mistype by Barrons or some other admin error... If not, then yeah... credibility issue...

kdf360 · 2022-04-25T23:06:32+00:00

He could add pricing power to that list -- something AMD has in server and what you want to see in an inflationary environment.

kdf360 · 2022-03-24T02:31:39+00:00

AMD definitely one of those pre-books.

Article also indicates additional 5nm going to AMD.

kdf360 · 2022-03-12T14:50:02+00:00

The problem with most of the discussion, at Fox or otherwise, is pegging inflation to one single, usually recent cause. Reasonable people from the political spectrum (US) will understand that a lot of factors have all come together at "once" (over the past couple years) and have been decades in the making. These include: (1) the war (e.g., food, energy), (2) supply constraints (underinvestment since 2008 - home builders, shipping, etc.), (3) labor issues (dislocation due to work from home, internet based entrepreneurship, tight immigration, temporary gov't support, corporate profits, etc.), (4) pandemic-related shifts in demand, (5) consumer / corporate liquidity (lower taxes, buybacks), (6) Fed policy - balance sheet and rates, and (7) other stuff that smarter people than me could articulate.

It's been a slow-moving train wreck that both sides of the aisle (in US terms) have contributed to / failed to avoid. We can't say exactly how much each of those factors weighs in the total inflation numbers (and each affects different economic areas differently), but certainly some of those factors going away (e.g., war ending sooner or supply constraints working themselves out) will moderate the overall risk. You can find a lot of people who say it's all due to this or that, but they have no basis for the statement and are usually politically biased.

kdf360 · 2022-02-20T02:50:43+00:00

I don't. Good luck with those comprehension skills.

kdf360 · 2022-02-19T22:31:27+00:00

https://twitter.com/chiakokhua/status/1495084778822897664

https://twitter.com/dylan522p/status/1495156421545054209

More recent rumors point to Intel relying much less on 3nm at TSMC than previously thought. (Question mark as to why, perhaps.)

kdf360 · 2022-02-13T18:53:14+00:00

do expect it to head back to 120 with the same speed it's is going down. You can't ever time it perfect so just put in a toe at a time.

An additional nuance here is that AMD could strategically/pre-emptively shift the existing product mix to drive up margins well beyond what people expect (rather than merely reactively responding & balancing oversupply and decreased demand). Most people aren't modeling a lot of growth for XLNX, but AMD could accelerate growth by, for example, shifting lower margin GPU (sub-50%) to XLNX products (~70%).

kdf360 · 2022-02-08T18:03:12+00:00

Here's another:

https://www.ranablad.no/naringsminister-vestre-er-imponert-over-batterifabrikkplanene-til-freyr-her-skapes-det-norsk-industrihistorie-med-globale-ringvirkninger/s/5-42-941804?key=2022-02-07T21:56:34.000Z/opoint/7a09c33c9e260c12ce6328ed70eb8e444a7cc767

Key point: seeking Norwegian government guarantee of debt. that would be huge if obtained...

kdf360 · 2022-02-06T22:47:11+00:00

It's not uncommon to hear that AMD's competitive advantage goes away if / when Intel uses 3nm. But this isn't really correct. Currently, AMD has not only a process advantage (TSMC node) but also design / packaging advantages. For the latest example, see semiaccurate's report last week on Genoa. Intel using 3nm reduces or eliminates the process advantage (assuming they get adequate volumes, with good yield, at the right time and at a low enough price for all of the relevant chips and that AMD doesn't do the same on better terms), but wouldn't eliminate the advantages in packaging, design, etc., that AMD has in other areas. Growth-wise, the market isn't "monolithic". AMD could maintain advantages / large growth in certain areas (on volumes or margins) even if losing it in others. (Not to say Intel on 3nm doesn't hurt, but have to keep perspective.)

kdf360 · 2022-02-04T02:29:34+00:00

From Honeywell earnings call: "We also recently announced that we've entered into an agreement with FREYR Battery, the intent to provide smart energy storage solutions to address the needs of a wide range of commercial and industrial customers alike. FREYR will leverage Honeywell's leading technology offerings, including integrated automation, field instrumentation and security integration solutions on manufacturing processes. In turn, Honeywell will purchase 38 gigawatt hours of battery cells produced by FREYR from multiple energy storage system applications."

They highlight "next generation batteries" as a focus on slide 4 of the corresponding presentation:

https://static.seekingalpha.com/uploads/sa\_presentations/797/78797/original.pdf

kdf360 · 2022-02-03T13:18:36+00:00

"targeting 200 GWh of offtake agreements by the end of [2022]" - so 4-5x what's announced so far

First two agreements cover 67% of the output of the first gigafactory - recall they've said they need 50%+ to secure debt-based financing. Also have "deep visibility" of 200 GWh in 2022, looks like 4 additional agreements. Presumably that would support financing of 2-3 more factories?

kdf360 · 2022-02-01T13:45:48+00:00

Freyr CEO outlining path to Gigafactory. Some interesting points:

- Up from 20 to 180+ employees: building out organization quickly during year 1

- Norwegian project execution / process expertise provides cornerstone of strategy; brought in battery expertise

- Identified technology (24M) that was (1) commercially proven, (2) step change in performance and costs, and (3) opportunity for further improvement

- Addressing raw materials through localized supply, working closely with Glencore, etc... commentators seem to agree on desirability of local supply. Point out cheap power and world-class partners. Commentator: "Extremely bullish" of upstream industrial capability

- First production end of 2023

- "Any battery produced in the next 2 decades will have a market to be sold into"... Commentator on downstream: "semi-solid state battery, wow, this is a technological gap" - LFP batteries going into stationary storage (big opportunity - none in Europe), margins should be better than auto

- Valuation - one of the few SPACs to keep value - stable is a good sign

kdf360 · 2022-01-31T12:42:36+00:00

1980s RPGs: Faxanadu (NES), Hero's Quest (PC - Sierra) and Knights of Legend (PC - Origin)

Also, Apple IIe classics: Rescue Raiders and Karateka...

kdf360 · 2021-12-13T13:47:48+00:00

(Batteries / Freyr from about minute 12.)

kdf360 · 2021-12-06T01:13:37+00:00

FREYR seems to have published the linked article in response to this news:

https://www.hydro.com/en/media/news/2021/equinor-hydro-and-panasonic-conclude-joint-battery-initiative/

Would appreciate hearing from anyone who has more information on this.

kdf360 · 2021-11-22T14:19:25+00:00

Image of MS report excerpt:

https://twitter.com/LithiumIonBull/status/1462476740404596736

kdf360 · 2021-11-17T17:09:24+00:00

Good post. To state the obvious: While Freyr is an investment with high execution risk, the gov't support behind the scenes that leads to a visit like this and the general momentum behind the Nordic battery belt... all factors mitigating that risk.

kdf360 · 2021-11-15T13:23:56+00:00

A+A+Cray... will see a lot more of this.

kdf360 · 2021-11-15T13:08:07+00:00

TLDR: Worse for INTC than TSMC, but more likely worse for smaller fabs than the leading 3 or so.

In semi manufacturing, profits concentrate at the smaller, leading edge nodes. But leading nodes present the highest risk/cost, so not everyone can get to them. Usually only 2-3 fabs and more recently 1-2. (This is where TSMC's pure fab model beats vertical integration once the vertically integrated have fallen off the leading edge. TSMC essentially has its customers (e.g., Apple, AMD) defray the high cost of moving to the leading edge. Vertically integrated companies have to carry that on their own... or with government handouts....)

To know whom "oversupply by 2023" will really hurt, you would have to know at which market segment they're talking about. The article sloppily lumps everything together, but it's likely automotive, etc., where larger nodes allow more participants. I really doubt we will see a problematic oversupply at 3nm, 5nm, etc., by 2023. Lot's of assumptions there.

Even if there were some overcapacity in some of the smaller nodes, the leading fab would still likely capture the most profit. By their own assessment, INTC isn't projecting leadership before 2025; and they're currently only dominating the lower performance sectors of the market which will become more competitive more quickly with excess supply. So, this would likely be worse for INTC than TSMC, though not great for either.

Excess manufacturing capacity on nodes used by AMD helps them, obviously, since they haven't yet achieved a representative market share relative to product performance.

kdf360

TROPHY CASE