超微半導體 (AMD) 2003 Q2 法說會逐字稿

Welcome to the AMD Q2 earnings conference call. During the presentation, all participants will be in a listen listen-only mode. Afterwards we will conduct a question and answer session. At that time, if you have a question, press the 1 followed by the 4 on your telephone. As a reminder, this conference is being recorded Wednesday, July 16th, 2003. I would like to turn the conference over to Michael Haase Director of Investor Relations.

歡迎參加 AMD 第二季財報電話會議。在演示過程中，所有參與者將處於只聽模式。之後我們將進行問答環節。那時，如果您有疑問，請在電話上按 1，然後按 4。提醒一下，本次會議將於 2003 年 7 月 16 日星期三進行錄製。我想將會議交給投資者關係總監 Michael Haase。

Thank you and good afternoon, everyone. The format of the call today will include prepared comments followed by Q and A. The participants are Hector Ruiz our President and CEO, Rob Herb, our EVP of Sales and Marketing and Bob Rivet our Chief Financial Officer. This call is a live broadcast and will be replayed at streetevent.com and AMD.com. The telephone number is 800-633-8284. Outside of the United States the number is 402-977-9140. The access code for both is 21154161. The telephone replay will be available for next 10 days starting 6 p.m. Pacific time today.

謝謝大家，下午好。今天的電話會議形式將包括準備好的評論，然後是問答環節。參與者包括我們的總裁兼執行長 Hector Ruiz、我們的銷售和行銷執行副總裁 Rob Herb 以及我們的財務長 Bob Rivet。本次電話會議為現場直播，將在 streetevent.com 和 AMD.com 上重播。電話號碼是800-633-8284。美國境外的電話號碼是 402-977-9140。兩者的存取代碼都是 21154161。電話重播將於下午 6 點開始提供，為期 10 天。今天太平洋時間。

For your planning purposes, I'd also like to take this opportunity to inform you that we will be launching our AMD after Athlon 64 processor for the desktops and mobile PC sectors on the 23rd of September here in San Francisco. Again, that's September 23rd, here in San Francisco. We will be sending out invitations to this event over the coming week, so keep an eye out for further details of the launch. I'd also like to share with you the date of our 2003 analyst's day. It will be held the morning of Thursday, November 6th, here in our Sunnyvale headquarters. Before we begin the call, I would like to caution everyone that we will be making forward- forward-looking statements about management's goals, plans and expectations.

為了您的規劃目的，我還想藉此機會通知您，我們將於 9 月 23 日在舊金山推出用於桌上型電腦和行動 PC 領域的 AMD 後 Athlon 64 處理器。再說一次，那是 9 月 23 日，地點是舊金山。我們將在下週發出活動的邀請，因此請密切關注發布的更多詳細資訊。我也想與大家分享我們 2003 年分析師日的日期。該會議將於 11 月 6 日星期四上午在我們位於桑尼維爾的總部舉行。在我們開始電話會議之前，我想提醒大家，我們將對管理層的目標、計劃和期望做出前瞻性的陳述。

As you know, the semiconductor industry is generally volatile. Our product and process technology development projects and our manufacturing processes are complex. Current worldwide economic and industry conditions make it especially difficult to forecast product demand at this time. Because our actual results may differ materially from our plans and expectations today, I encourage you to review our filings with the SEC where we discuss in details detail our risk factors and our business. You'll find detailed discussions in our most resent SEC filings, including the annual report on form 10-K and our first quarter form 10-Q. I would like to introduce Hector Ruiz.

眾所周知，半導體產業整體波動較大。我們的產品和製程技術開發專案以及製造流程非常複雜。當前全球經濟和產業狀況使得預測產品需求變得特別困難。由於我們的實際結果可能與我們今天的計劃和預期有重大差異，我鼓勵您查看我們向美國證券交易委員會提交的文件，我們在其中詳細討論了我們的風險因素和業務。您可以在我們最新的 SEC 文件中找到詳細的討論，包括 10-K 表格年度報告和第一季 10-Q 表格。我想介紹一下赫克托·魯伊斯。

Thank you, Mike. Once again, I would like to begin with a report on our continued progress to profit profitability. I will then ask Bob to go into some detail on the past quarter with some comments about our near-term outlook. I will then close with comments on our longer-term prospects before taking your questions.

謝謝你，麥克。再次，我想先報告我們在獲利能力方面持續取得的進展。然後我會請鮑伯詳細介紹過去一個季度的情況，並對我們的近期前景發表一些評論。在回答你們的問題之前，我將對我們的長期前景發表一些評論。

Let me start by saying that while we're pleased with the progress we've made on a number of very important fronts, we're more disappointed than anyone with our top line performance and I will get to that later. I want to summarize some of the progress that we've made on our baseline priorities. We continue to manage well our PC value chain inventories to very tight levels. We're now down to about four weeks, which is right where we would like them to be. We're actively managing our capital base, financial shall the second quarter with $739 million in cash, despite a very challenging quarter. And we continue our companywide effort to reduce our break-even and make our cost structure more variable in nature. In fact, I'm very pleased to report in the second quarter, we've made or $800 million cost target by a full $31 million, and this is over $128 million per quarter or 14% below our break- break-even only four quarters ago.

首先我要說的是，雖然我們對在許多非常重要的方面取得的進展感到滿意，但我們對我們的營收表現比任何人都更失望，我稍後會談到這一點。我想總結一下我們在基本優先事項上取得的一些進展。我們繼續將個人電腦價值鏈庫存管理得非常好，並保持在非常緊張的水平。現在我們已經縮短到大約四周，這正是我們所希望的。我們正在積極管理我們的資本基礎，儘管本季充滿挑戰，但第二季的財務狀況仍將保持 7.39 億美元現金。我們將繼續全公司範圍的努力來降低損益平衡點，並使我們的成本結構更加多樣化。事實上，我很高興地報告，在第二季度，我們已實現 8 億美元的成本目標，比原定的目標高出整整 3,100 萬美元，這比四個季度前的盈虧平衡點低了每季度 1.28 億美元或 14%。

We will continue to drive this discipline across into our organization, as we intensify our attention on growing our top line. I mention our breakthrough technology agreement with IBM as an example of our operational strategy gee. We are thrilled and happy with the progress of our relationship with IBM as we expand our flow of engineers to their Richfield facility. Our insulin silicon insulator yield and performance are at mature levels, faster than any note in technology than we have ever done and as we align ours and IBM's trajectories, our nanometer process technology is looking very robust at this point in time. We're looking at one of the steepest -- in history with our product shipments beginning for 90 nanometers– in the mid year 2004. Another example of our operation of flexibility effort is our flash memory joint venture with Fujitsu. We have expanded in this access to new assets, markets and revenues and we fully expect to be able to exploit the same operational efficiency as our consolidated flash memory business continues to expand.

我們將繼續在我們的組織中推行這項紀律，同時我們將更專注於增加我們的營業收入。我提到我們與 IBM 達成的突破性技術協議作為我們營運策略的一個例子。隨著我們向 IBM 的里奇菲爾德工廠擴展工程師隊伍，我們對與 IBM 的合作關係的進展感到非常高興和高興。我們的胰島素矽絕緣體的產量和性能已經達到成熟水平，比我們以往任何時候的技術進步都快，而且隨著我們與 IBM 的發展軌跡保持一致，我們的奈米製程技術目前看起來非常穩健。我們正面臨史上最急劇的一次產品出貨量，2004 年中期我們的 90 奈米產品開始出貨。我們靈活運作的另一個例子是與富士通合資成立的快閃記憶體公司。我們擴大了對新資產、新市場和新收入的獲取，並且我們完全期望能夠隨著我們合併的快閃記憶體業務的不斷擴大而利用同樣的營運效率。

The leadership team is in place and we're well on our way to integrate in operations. We believe we're on track to be the world's largest flash memory provider in the very near future. In a few moments, I'll ask Bob to outline how this agreement will affect our financials in subsequent periods. While channel softness and the SARS epidemic undermine our ability to reach our aggressive top line projections for the quarter, we're still able to make strong progress on key revenue initiatives, new ones, which include servers, where our AMD family continues to show impressive gains. With our partners, for our growing list of top tier participants, including IBM, Microsoft, Sun, Oracle, Computer Associates, and many others. With awards recently honored [inaudible] at best of show on the world conference in San Francisco. And more importantly, with customers, we're early -- we're exceeding our own partners expectations. In this past quarter we were chosen as the basis of high profile super computer projects at the University of Michigan , Manchester University and Texas A&M University. Continuing in the high performance computing segment.

領導團隊已經到位，我們正在順利地整合營運。我們相信，不久的將來我們將成為全球最大的快閃記憶體供應商。稍後，我將請鮑伯概述該協議將如何影響我們後續時期的財務狀況。儘管通路疲軟和非典疫情削弱了我們實現本季積極的營收預測的能力，但我們仍然能夠在關鍵收入計劃和新計劃上取得強勁進展，其中包括伺服器，我們的 AMD 家族繼續顯示出令人矚目的成長。與我們的合作夥伴一起，我們的頂級參與者名單不斷增加，其中包括 IBM、Microsoft、Sun、Oracle、Computer Associates 等。最近在舊金山舉行的世界會議上，我們獲得了最佳展覽獎 [聽不清楚]。更重要的是，對於客戶來說，我們比之前更早——超越了我們合作夥伴的期望。在過去的一個季度，我們被選為密西根大學、曼徹斯特大學和德克薩斯 A&M 大學備受矚目的超級電腦計畫的基礎。繼續在高效能運算領域發展。

We're looking forward to IBM and Fujitsu in the near future. In the first quarter of its existence, we have shipped more processors than our leading competitors 64 bits processor family shipped in all of 2002. China is another key target for top line growth. And despite the adverse effect of SARS in our flash and processor channel business in quarter, it is important to know that AMD revenues in china were up by 60% year on year. Building on our momentum, AMD and its 64 processors remained best IC innovation for 64-bit processors by the China Semiconductor Industry Association. In addition, our new partners Amora (ph)Sonic and CHINGWA Unit Splendor (ph) will be shipping mobile processors this month.

我們期待不久的將來與 IBM 和富士通合作。在推出後的第一個季度，我們的處理器出貨量就超過了我們主要競爭對手 64 位元處理器系列在 2002 年全年的出貨量。中國是另一個實現營收成長的關鍵目標。儘管本季 SARS 對我們的快閃記憶體和處理器通路業務產生了不利影響，但值得注意的是，AMD 在中國的營收年增了 60%。憑藉我們的良好勢頭，AMD 及其 64 位元處理器繼續被中國半導體行業協會評為 64 位元處理器最佳 IC 創新。此外，我們的新合作夥伴 Amora (ph)Sonic 和 CHINGWA Unit Splendor (ph) 將於本月發售行動處理器。

And in the mobile segment, or in addition to our recent success in China, we announced our new XP mobile 3000 Plus and 1900 plus processors for [inaudible] light computers. We launched our Apple XP mobile 28 plus into the growing desktop replacement segment. And we continue to advance our solid position with consumers in the retail channel. Finally, in flash or in addition to closing our landmark deal with Fujitsu, we were honored by Samsung in 2002. We are ramping demand and record shipments of our breakthrough technology with first shipments to a major cellular customer in the second quarter. We continue to strengthen our leadership position in the strategically important wireless arena, an important driver of high density demand. We remain one of the two or three companies that are poised to deliver the high density flash memory as evidenced by our half gigabyte sampling this quarter and we will deliver first shipments of 133 nanometer flash from our 525 for the balance of the year.

在行動領域，除了我們最近在中國的成功之外，我們還宣布推出用於 [聽不清楚] 輕型電腦的新型 XP mobile 3000 Plus 和 1900 plus 處理器。我們將 Apple XP mobile 28 plus 推向了日益增長的桌上型電腦替代市場。我們將繼續鞏固我們在零售通路中消費者心目中的地位。最後，除了與富士通達成具有里程碑意義的交易之外，我們還在 2002 年獲得了三星的嘉獎。我們正在加大對突破性技術的需求，並創下出貨量記錄，首批產品已於第二季交付給大型蜂窩客戶。我們持續加強在具有重要策略意義的無線領域的領導地位，這是高密度需求的重要驅動力。我們仍然是準備提供高密度快閃記憶體的兩三家公司之一，這從我們本季提供的半千兆位元組樣品就可以看出，並且我們將在今年餘下時間內從我們的 525 晶片中交付首批 133 奈米快閃記憶體。

Servers, china in the mobile segment are three important areas of folk focus that will fuel both top line growth and the strength of our customer relationships. In our refined flash joint venture for both immediate and the promise of future top line growth as well. To close, I would like to assert that we're making a strong progress to reduce our restructure on our coast and improve our operational flexibility and position ourselves for success with the carriers we have targeted for revenue growth the balance of this year and into 2004. At this point, I would like to ask Bob Rivet to review the current quarter results.

伺服器、行動領域的中國是人們關注的三個重要領域，它們將推動營收成長和客戶關係的加強。在我們精煉的快閃合資企業中，既有眼前的成長，也有未來收入成長的希望。最後，我想強調的是，我們在減少沿海地區重組、提高營運靈活性以及與航空公司合作取得成功方面取得了顯著進展，我們的目標是在今年剩餘時間和 2004 年實現收入成長。現在，我想請鮑伯·裡維特回顧一下本季的業績。

Thanks, Hector. I will start with the review of our second quarter results and conclude with some forward- forward-looking guidance that will include the effect of the integration of Fujitsu’s flash memory business into AMD (ph).

謝謝，赫克托。我將首先回顧我們的第二季度業績，最後給出一些前瞻性的指導，其中包括富士通閃存業務併入 AMD 的影響（ph）。

Second quarter sales were $645m up 7% year over year. In what is typically a seasonally weak quarter, sales are down 10% compared to the first quarter. The effect of the SARS epidemic and weaker than anticipated channel sales in some of our international market segments impacted second quarter sales. AMD's operating launch in the second quarter was $123 million, down 59% from the same period a year ago and down from $125 million in the first quarter of this year.

第二季銷售額為 6.45 億美元，年增 7%。在這個通常屬於季節性疲軟的季度，銷售額與第一季相比下降了 10%。SARS疫情的影響以及部分國際市場通路銷售低於預期影響了第二季的銷售。AMD 第二季的營業利潤為 1.23 億美元，較去年同期下降 59%，也低於今年第一季的 1.25 億美元。

Our reduction in operating loss in the quarter was driven by continuous progress in our ongoing cost reduction program. Compared to the first quarter, operating margin follow through was excellent as evidenced by reduction losses despite the $69 million sales decline.

本季營運虧損的減少得益於我們正在進行的成本削減計劃的持續進展。與第一季相比，儘管銷售額下降了 6,900 萬美元，但營業利潤率的後續表現仍然出色，損失減少就是明證。

And as we set out to accomplish in October of last year, we reduced our operating loss by more than $200 million. Gross margin improved for the 5th consecutive quarter in a row to 34% for the quarter, up from 31% in the first quarter. Operating expenses were virtually flat with research and development spending of $209 million for the quarter, and marketing general and administrative expenses of $135 million for the quarter. That launch in the second quarter improved $140 million, or 40 cents per share, compared to $146 million or 42 cents per share in the first quarter.

正如我們去年 10 月設定的目標一樣，我們將營運虧損減少了 2 億多美元。毛利率連續第五季提高，本季毛利率為 34%，高於第一季的 31%。本季營運費用基本持平，研發支出為 2.09 億美元，行銷一般及行政支出為 1.35 億美元。第二季該產品的發布增加了 1.4 億美元，即每股 40 美分，而第一季則增加了 1.46 億美元，即每股 42 美分。

Year over year, net loss improved 24% from $185 million dollars over 54 cents loss per share. We're pleased to report that our operating break-even point for the second quarter was $769 million, exceeding our October guidance last year while we embarked on our operational flexibility program and set an aggressive goal of operating break-even point below $800 million by the second quarter of this year. We achieved this. There is no material currency effect on the second quarter as most of our currency was reasonably covered. While switching to the business revue for the quarter -- second quarter PC processing revenue was $402 million, a decrease of 14% as compared to the $468 million in the first quarter and an increase of 6% over the same period of a year ago. Increased sales with our tier 1 customer base were not high enough to offset weaker than anticipated channel sales in our Asian and European market segments during the quarter. Accordingly, we reduced shipments in those channels and tightly managed inventories in the PC supply chain. As a result we believe AMD's base inventories in the supply chain are now at four weeks.

與去年同期相比，淨虧損改善了 24%，從 1.85 億美元減少到每股 54 美分。我們很高興地報告，我們第二季度的營運盈虧平衡點為 7.69 億美元，超過了去年 10 月的預期，同時我們啟動了營運靈活性計劃，並設定了一個積極的目標，即在今年第二季度將營運盈虧平衡點降至 8 億美元以下。我們實現了這個目標。由於我們的大部分貨幣都得到了合理覆蓋，因此第二季度沒有受到重大貨幣影響。轉至本季的業務收入－第二季PC處理營收為4.02億美元，較第一季的4.68億美元下降14%，較去年同期成長6%。本季度，我們一級客戶群的銷售額成長不足以抵銷亞洲和歐洲市場通路銷售額低於預期的損失。因此，我們減少了這些通路的出貨量，並嚴格管理個人電腦供應鏈中的庫存。因此，我們認為 AMD 在供應鏈中的基本庫存目前為四周。

In the second quarter, flash memory revenue was $211 million down slightly compared the first quarter. Year over year memory sales were up 20% compared to the $175 million dollars in the second quarter of 2002. While the SARS epidemic caused the decline in demand for cellular handset and resulted in significant lower flash memory sales for AMD in Asia, this decline was almost entirely off offset by an increase of memory sales in North America and Europe. With our continued share gains in the high end cellular hand set market, along with our leadership position in high density flash memory, the shipments grew for the second consecutive quarter, once again to record levels and our average density nearby doubled compared to the second quarter of 2002. -- seven consecutive, excuse me.

第二季度，快閃記憶體營收為2.11億美元，較第一季略有下降。與 2002 年第二季的 1.75 億美元相比，記憶體銷售額年增了 20%。雖然 SARS 疫情導致手機需求下降，並導致 AMD 在亞洲的快閃記憶體銷量大幅下降，但這一下滑幾乎完全被北美和歐洲的記憶體銷售成長所抵消。由於我們在高階蜂窩手機市場的份額不斷增加，加上我們在高密度閃存領域的領導地位，出貨量連續第二個季度增長，再次達到創紀錄的水平，我們的平均密度與 2002 年第二季度相比幾乎翻了一番。 - 連續七個，對不起。

With continued cost structure our EBITDA in the second quarter continued to improve to $97 million from $87 million in the first quarter. Again, this was consistent with our prior guidance of positive and growing EBITDA in the second quarter. Now, let's turn to the balance sheet. Cash balances at the end of the second quarter are at $739 million, down only $61 million from last quarter's closing balance. We successfully renegotiated and extended our $200 million revolving line of credit, currently untapped, during the quarter, which now expires in July of 2007. Capital expenditures were $103 million in the second quarter, compared to $181 million in the first. And once again, quarterly depreciation was larger than capital expenditures. Accounts receivable sales out outstanding were relatively flat at 52 days from the first quarter was well over 50 days. The AMD's headcount was 11,700, down from 12,100 in the first quarter, and 13,700 in the second quarter of last year. Now I'd like to discuss the out outlook and discuss some of the changes of AMD's and Fujitsu's flash memory operations into FASIL, LLC a consolidated subsidiary of AMD we'll have on our future. AMD will consolidate Fasil's LLC financial results in an income statement and balance sheet. There will be a provision in the AMD’s financials below the operating profit and loss line to reflect FUJITSU's 40% share of the new company's profits and the appropriate minority interest on the balance sheet. At the start of the third quarter, AMD's consolidated balance sheet will take on incremental assets and liabilities from FASIL, LLC of approximately $1 billion dollars, which includes $180 million in cash, and $190 million of debt.

隨著成本結構的持續，我們第二季的 EBITDA 從第一季的 8,700 萬美元繼續提高到 9,700 萬美元。再次，這與我們先前對第二季 EBITDA 呈正成長的預期一致。現在，讓我們來看看資產負債表。第二季末的現金餘額為 7.39 億美元，僅比上一季的期末餘額下降 6,100 萬美元。我們在本季成功重新協商並延長了目前尚未動用的 2 億美元循環信貸額度，該額度將於 2007 年 7 月到期。第二季的資本支出為 1.03 億美元，而第一季為 1.81 億美元。再一次，季度折舊額大於資本支出。應收帳款銷售未償付天數相對持平於 52 天，而第一季則遠高於 50 天。AMD 員工總數為 11,700 人，低於第一季的 12,100 人，也低於去年第二季的 13,700 人。現在我想討論我們的前景，並討論 AMD 和富士通的快閃記憶體業務合併為 AMD 的合併子公司 FASIL, LLC 的一些變化。AMD 將在損益表和資產負債表中合併 Fasil's LLC 的財務表現。AMD 財務報表中將在營業損益線以下設立一項撥備，以反映富士通在新公司利潤中所佔的 40% 份額以及資產負債表上的相應少數股東權益。第三季初，AMD 的合併資產負債表將從 FASIL, LLC 獲得約 10 億美元的增量資產和負債，其中包括 1.8 億美元現金和 1.9 億美元的債務。

Headcount will increase in the third quarter by approximately 2700 people, due to the consolidation of FASEL, LLC, memory operations. We believe that third quarter process sales will be up based on normal seasonal -- normal industry seasonality along with enhanced product position on increased shipments of AMD processors and initial shipments of AMD Athlon 64 processors. AMD expects its flash memory business to improve based on continued market share gains in the high-end cellular handset and recovery of the Asian markets.

由於 FASEL, LLC 記憶體業務的合併，第三季員工總數將增加約 2700 人。我們相信，第三季的處理器銷售額將會基於正常的季節性因素（正常的產業季節性）而成長，同時由於 AMD 處理器出貨量增加以及 AMD Athlon 64 處理器初始出貨量增加，產品地位也會增強。AMD 預計，隨著高階手機市場份額的持續成長和亞洲市場的復甦，其快閃記憶體業務將會有所改善。

On top of our expected growths from the existing AMD flash memory business, we believe that the combination of AMD's and Fujitsu's combination into FASIL, LLC will add an incremental $180 million of consolidated sales. With the consolidation of Fasil, LLC/ Operations the company anticipates its third quarter cost structure to be approximately $1 billion. First half 2002 capital expenditures were $283 million. Our capital expenditures planned for the second half of 2003 will now include Fasil, LLC, and we expect the expenditures to be approximately $725 million.

除了我們預期現有 AMD 快閃記憶體業務將實現成長之外，我們相信 AMD 和富士通合併成立 FASIL, LLC 將增加 1.8 億美元的合併銷售額。隨著 Fasil, LLC/Operations 的合併，該公司預計其第三季的成本結構約為 10 億美元。2002 年上半年資本支出為 2.83 億美元。我們計劃在 2003 年下半年進行的資本支出將包括 Fasil, LLC，我們預計支出約為 7.25 億美元。

Depreciation and amortization for the first half of 2003 was $423 million. Depreciation and amortization considering FASIL, LLC, is expected to be approximately $975 million for the full year. Consistent with our prior guidance, our quarterly tax rate will be zero until we return to profitability. Once profitability, we anticipate the tax range to be within the 10%to 20% range. And finally, with the third quarter opening cash balance of $919 m, made up of $739m from AMD's second quarter ending cash balance, plus $180m cash contribution by FIJITSU, plus continuing growing EBITDA, we expect cash to be minimal for the third quarter. In summary, we believe our costs are under control, and we're seeing improving fundamentals going forward. We're doing everything possible to return to profitability as quickly as possible. I'll turn it back over to Hector.

2003 年上半年的折舊和攤提為 4.23 億美元。考慮到 FASIL, LLC，預計全年折舊和攤提約為 9.75 億美元。與我們先前的指導一致，我們的季度稅率將為零，直到我們恢復獲利。一旦獲利，我們預計稅率範圍將在 10% 至 20% 之間。最後，第三季初現金餘額為 9.19 億美元，其中包括 AMD 第二季期末現金餘額 7.39 億美元，加上 FIJITSU 貢獻的 1.8 億美元現金，再加上持續成長的 EBITDA，我們預計第三季的現金將很少。總而言之，我們相信我們的成本得到了控制，我們看到未來基本面正在改善。我們正在盡一切努力盡快恢復盈利。我會把它交還給赫克托。

Thank you, bob. In summary, I want to share with you our reasons for being increasingly optimistic as we enter the second half of the year.

謝謝你，鮑伯。總而言之，我想與大家分享我們在進入下半年時越來越樂觀的原因。

First, we're well positions to succeed in our flash business. With the consolidation of AMD And Fujitsu , we enter the second half with the leading position in the strongest growth segment of the business, cellular handsets. We believe that the SARS phenomena is largely behind us. We believe AMD is uniquely poised to capture an increasing share of the rapidly growing high density portion of the market. We expect our new expansion brand to be the number one flash memory brand in the world, and we expect to see a continuation of our strong second quarter growth trajectory.

首先，我們的快閃記憶體業務已做好準備，能夠取得成功。隨著 AMD 和富士通的合併，我們將在下半年在業務成長最強勁的蜂窩手機領域佔據領先地位。我們相信，SARS現像已基本過去。我們相信，AMD 擁有獨特的優勢，能夠在快速成長的高密度市場中佔據越來越大的份額。我們預計我們的新擴展品牌將成為全球第一的快閃記憶體品牌，並且我們預計第二季強勁的成長軌跡將得以延續。

Second, we're looking for a solid ramp on processors. We have demonstrated benchmark performance in both 2P and 4P mode. We have secured Microsoft's commitment to develop native versions of 64windows XP and the windows server 2003 operating systems. We have commitments from top tier enterprise including Oracle, IBM and Computer Associates, as well as others. We have IBM and Fujitsu in the future. And our violator server program makes it easy for anyone for to minimize mayor product development cycle. Third, we have your upcoming launch of our AMD Athlon 64 processor family. It will build on the momentum of our -- and you will signal the beginning of our new era of 64 bit computering. (ph) We hope you can join us on September 23rd, either in person or in San Francisco or on the web for the upcoming launch of our Athlon 64 desktop and mobile processor family. Before I close, I want to do my best to acknowledge the in incredible effort of each and every AMD employee to bring this company back to profitability. Their capacity to drive operating costs down by over $120 million per quarter in the past year, while delivering year and year revenue growth of $45 million is a testimonial to the drive, desire and commitment to our great company. We have great people. We have great products, and we have world class processing manufacturing expertise. And we have an opportunity for greatness in this business. We've set our mind on cutting costs, and we did it, resulting in our highest growth margins in microprocessors in recent history, despite a lower revenue base. We've set our minds on Guam becoming number one in the flood warning flash business and we did it. Closing our landmark agreement with FIJITTSU. We will be number one in the very near term, if not there already. We set our mind to reinventing the server business and we did it, launching arguably the most exciting and highest performing processor platform to hit the enterprise server arena in years years. We set our minds in moving the whole industry forward to a new standard of computing, and we did it with our after Athlon processor family which will deliver new capabilities, the world's high highest performing desk desktop systems and a new cycle of innovation in the industry. With one-tenth the resources of our competitors, we're driving the industry to new standards in manufacturing, performance and user experience. We've done everything that we said we would do. We have with one key exception. Going forward, we need to do a better job on getting compensated for the performance we're delivering our products and the value that we bring to the industry. But as we responded to this prior challenges in past, we will do it again, and we'll do it by improving our customer profile, becoming more relevant to our customer and by participating in the enterprise segment to the introduction of the soon to be announced Athlon 64 processor. Like COPTERON, we will manage our assets to get what we deserve for the innovation and value that we're providing our customer. We're strategically important to this industry, a point for a better alternative to a monopoly monopoly. We're poised to Chang the industry, the combination of our people, our technology and the support of our customers and partners is a combination with great potential in both the immediate and long-term future. Thank you for your attention and I would like to turn over to Mike for the Q & A.

其次，我們期待處理器的穩定成長。我們已經展示了 2P 和 4P 模式下的基準效能。我們已獲得微軟的承諾，開發 64 位元 Windows XP 和 Windows Server 2003 作業系統的原生版本。我們獲得了包括 Oracle、IBM、Computer Associates 等頂級企業的承諾。未來我們有IBM和富士通。我們的違規者伺服器程式使任何人都可以輕鬆縮短主要產品開發週期。第三，我們即將推出 AMD Athlon 64 處理器系列。它將以我們的勢頭為基礎——這將標誌著我們 64 位元電腦新時代的開始。 （ph）我們希望您能於 9 月 23 日親自或在舊金山或透過網路參加我們即將推出的 Athlon 64 桌上型電腦和行動處理器系列。在結束之前，我想盡我所能感謝每一位 AMD 員工為使公司恢復盈利所做的巨大努力。在過去的一年裡，他們每季將營運成本降低 1.2 億美元以上，同時實現 4,500 萬美元的逐年收入成長，這證明了我們偉大公司的動力、渴望和承諾。我們擁有優秀的人才。我們擁有優質的產品，並擁有世界一流的加工製造專業知識。我們有機會在這個行業中取得巨大成就。我們決心削減成本，並且我們做到了，儘管收入基礎較低，但我們的微處理器業務實現了近代歷史上最高的成長利潤率。我們決心讓關島成為洪水預警業務領域的領導者，而我們做到了。與 FIJITTSU 達成具有里程碑意義的協議。即使現在還沒有達到第一，我們也將在不久的將來成為第一。我們決心重塑伺服器業務，並且我們做到了，推出了多年來最令人興奮、效能最高的處理器平台，進入企業伺服器領域。我們決心推動整個行業邁向新的運算標準，並且我們透過下一代 Athlon 處理器系列實現了這一目標，該系列將提供新功能、世界上性能最高的桌面系統以及行業的新一輪創新。我們利用競爭對手十分之一的資源，推動產業在製造、性能和用戶體驗方面達到新的標準。我們已經完成了我們說過要做的一切。但有一個關鍵的例外。展望未來，我們需要更好地根據我們提供的產品的性能和為產業帶來的價值獲得補償。但是，正如我們過去應對過這些挑戰一樣，我們會再次這樣做，而且我們會透過改善我們的客戶形象、與客戶建立更緊密的聯繫以及參與企業領域來推出即將發布的 Athlon 64 處理器。像 COPTERON 一樣，我們將管理我們的資產，以獲得我們為客戶提供的創新和價值應得的回報。我們對這個產業具有重要的戰略意義，是壟斷的更好替代方案。我們已準備好改變這個行業，我們的員工、我們的技術以及我們的客戶和合作夥伴的支持的結合，無論在當前還是長遠的未來都具有巨大的潛力。感謝您的關注，我想把時間交給麥克進行問答。

Ladies and gentlemen, if you would like to register a question, please press the 1, followed by the 4 on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered, and like to withdraw your registration, please press the 1, followed by the 3. If you are using a speaker phone phone, please lift your handset were entering your request. One moments, please, for the first question. Our first question comes from the line of Joe Osha, with Merrill Lynch. Please proceed with your question.

女士們、先生們，如果您想提出問題，請在電話上按 1，然後按 4。您將聽到三聲提示音來確認您的要求。如果您的問題已得到解答，並且想要撤銷註冊，請按 1，然後按 3。如果您使用的是揚聲器電話，請拿起聽筒輸入您的請求。請稍等片刻，回答第一個問題。我們的第一個問題來自美林證券的喬·奧沙。請繼續您的問題。

Hey, I made it right up front front. A few issues. For starters, Bob, talking about this $180 million sequin recall delta in flash revenues, how much of that flows from organic, growth, full, and how much simply from the mathematics of consolidating the business?

嘿，我已經把它做好了。一些問題。首先，鮑勃，談到快閃記憶體收入中 1.8 億美元的亮片召回增量，其中有多少來自有機增長、全面增長，又有多少僅來自業務整合的數學計算？

You got it wrong, Joe. Here's what you should do. AMD and what growth you want to apply to AMD, plus $180 million to get your answer.

你錯了，喬。您應該這樣做。AMD 以及你想為 AMD 申請什麼樣的成長，再加上 1.8 億美元就能得到你的答案。

I'm sorry, say that again?

對不起，你再說一次好嗎？

So, AMD's existing business, plus whatever growth you want to assume, plus $180 million.

因此，AMD 的現有業務，加上您想要的任何成長，再加上 1.8 億美元。

So that $180 is purely driven by the consolidation?

那麼 180 美元純粹是由合併推動的嗎？

You bet.

當然。

Okay, thank you. Second question, as you talk about the billion dollar operating cost structure, can you, you know, hypothetically, can you talk a little bit about how that would be apportioned between cogs and R&D and SG&A or talk about how R&D and SG&A. Might look.

好的，謝謝。第二個問題，當您談到 10 億美元的營運成本結構時，您能否假設性地談談如何在齒輪、研發和銷售、一般和行政費用之間分配這些成本，或者談談研發和銷售、一般和行政費用如何分配。可能看起來。

I don't want to give you that because we're working through that. Obviously, one of the things we're entitled to do as we put this operation together is go work through some of the cost synergies and redundancy issues. Most of the cost is manufacturing.

我不想給你這個，因為我們正在解決這個問題。顯然，我們在整合這項業務時有權做的事情之一就是解決一些成本協同和冗餘問題。大部分成本是製造成本。

So we should think billion dollar break-even for the near term?

那我們應該認為 10 億美元的營收在短期內就能達到收支平衡嗎？

That's right.

這是正確的。

And then third and final, can you give us some very rough sense as to what OPTERON revenues look like? There was a comment relative to Intel, but maybe a little bit more to work with there?

第三點也是最後一點，您能否粗略地介紹一下 OPTERON 的收入狀況？有一個與英特爾相關的評論，但也許還有更多內容可以參考？

Joe, I don't think we're prepared to give you any granularity at the moment. They intent of the comment on our competitor was really just to show that we're getting an awful lot of traction on OPTERON, and frankly many of us expected, perhaps, and we should see the impact of that mostly next year, much more than this year.

喬，我認為我們目前還沒有準備好向您提供任何詳細資訊。他們對我們的競爭對手發表評論的目的實際上只是為了表明我們在 OPTERON 上獲得了巨大的發展，坦率地說，我們中的許多人可能都預料到了，我們應該在明年看到這種影響，比今年要大得多。

Tears fair to say that it's fairly diminish?

眼淚可以說相當減少了嗎？

On the OPTERON side, yes.

在 OPTERON 方面，是的。

Thank you very much.

非常感謝。

Our next question comes from Andrew Root [inaudible].

下一個問題來自安德魯·魯特 [聽不清楚]。

You said process inventories are around four weeks. Is there any distinction between inventories at OEMs versus the rest of the channel? Are they lower at the OEM level?

您說流程庫存大約需要四周。原始設備製造商的庫存與其他通路的庫存之間有什麼區別嗎？它們在 OEM 級別上是否較低？

Robert, would you like to comment on that? Four weeks is as aggregate statement based on sales information. We've decided that overall, that we do have different models for each of the different businesses businesses. I can't tell you from a profits standpoints if you went through Q2, our sales to our tier 1, our largest OEMs is up quarter on quarter. And that offset the decline we saw in the channel. So we very aggressively manage the shipments in the channel to maintain the inventory position we want at the end of the quarter. The good news is, the last week or two of the quarter, we saw a fairly substantial increase in the resale activity which carried through into this quarter. So, you know, we're heavily dependent upon that tier 2 and reseller market to drive our business and this was a difficult quarter particularly in Asia related to SARS, but also in Europe, it looks like that appears to be on the rebound here at least early in the quarter.

羅伯特，您願意對此發表評論嗎？四週為根據銷售資訊彙總報表。整體而言，我們決定針對不同的業務制定不同的模型。如果您回顧第二季度，我無法從利潤的角度告訴您，我們對一級、最大 OEM 的銷售額是環比增長的。這抵消了我們在渠道中看到的下滑。因此，我們非常積極地管理通路中的出貨量，以維持我們在本季末想要的庫存水準。好消息是，在本季的最後一兩週，我們看到轉售活動大幅增加，而這種成長一直延續到本季。所以，你知道，我們嚴重依賴二級市場和經銷商市場來推動我們的業務，這是一個艱難的季度，特別是在亞洲，與 SARS 有關，但在歐洲也是如此，看起來至少在本季度初，這裡的經濟似乎正在反彈。

On an order of magnitude days base sis, on sequential growth, week over week, was it single digits? Was it double digits? Was it just order of magnitude sense.

以數量級計算，以週數成長，是一位數嗎？是兩位數嗎？這僅僅是數量級意義上的嗎？

Without getting further into the details, it's double digits. That's why it was a fairly strong last quarter. [inaudible]

無需進一步了解細節，它是兩位數。這就是上個季度表現相當強勁的原因。 [聽不清楚]

What proportion of your revenue would be tier 1 OEM versus the other?

您從一級 OEM 獲得的收入佔比是多少？從其他 OEM 獲得的收入佔比是多少？

I don't think we want to get into providing that level of detail and guidance.

我認為我們不想提供這種程度的細節和指導。

Okay, that's fair. Maybe a more macro cost question for Bob. In terms of your overall break- break-even, the $769m for the quarter, I know this might be tough to tell, but the -- I think the break even target was originally if you are at $800m you would be at break even. Does that apply to incremental revenue from here to $800m revenue you would have a gross margin of 80%, so if you were at $800m, maybe you would have broken even this quarter?

好的，這很公平。對鮑伯來說，這可能是一個更宏觀的成本問題。就你們本季的整體收支平衡點而言，即 7.69 億美元，我知道這可能很難說，但我認為最初的收支平衡目標應該是，如果達到 8 億美元，就能實現收支平衡。這是否適用於從現在到 8 億美元收入的增量收入，您的毛利率將達到 80%，因此，如果您的收入為 8 億美元，也許您本季就能收支平衡？

That's not too far off. That's been the model. We've been trying to move the variable cost component from about 20% to 30%. We're about halfway through that that, so it's someplace between 80 and 75.

那並不太遠。這就是模型。我們一直在努力將變動成本部分從約 20% 提高到 30%。我們已經完成了一半，所以它在 80 到 75 之間。

So that's -- as we model in in -- I mean, we have to figure out FASIL, but as we model it, AMD that's where we should be for incremental gross margin?

所以這就是 - 正如我們所建模的 - 我的意思是，我們必須弄清楚 FASIL，但是當我們對其進行建模時，AMD 應該是增量毛利率的地方嗎？

Yes.

是的。

Thank you.

謝謝。

Our next question comes from the line of Bob Ritsus (ph) with Bear Stearns?

我們的下一個問題來自貝爾斯登公司的 Bob Ritsus（音譯）？

Did you arrange your revenue numbers like Intel does for the Q3 or are you going to let us guess at that?

您是否像英特爾一樣安排了第三季的收入數字，還是讓我們猜測？

No, we don't -- we do what we think makes sense at the end of the quarter. Right now the best he can tell you with the tremendous challenge. Assimilation of the flash operations, we feel very confident that due to seasonality and the signals we get from our customers that as Bob pointed out in his comments, processor revenue will be up in the third quarter, flash memory will be up also in the third quarter. And at this point in time, that's all we can tell you.

不，我們不會——我們會在季度末做我們認為有意義的事情。現在，面對巨大的挑戰，他能告訴你的最好的事情就是。結合閃存業務，我們非常有信心，由於季節性和我們從客戶那裡得到的信號，正如鮑勃在他的評論中指出的那樣，處理器收入將在第三季度上升，閃存也將在第三季度上升。目前，我們只能告訴你這些。

Okay.

好的。

Our next question comes from the line of Quinn Bolton. Please proceed -- from Oppenheimer. Please proceed.

我們的下一個問題來自奎因·博爾頓。請繼續——來自奧本海默。請繼續。

I was wondering if you can give us detail on this sort of unit and ASP pricing trends on the processor business. I'm sure you can't give us tools, but maybe a percentage and then just wanted to come back to the international channel weakness. It sounds like it's China or Asia and Europe, I think SARS explains Asia, but if you could give detail as to why you think Europe slowed down in the second quarter, that would be helpful. Thank you.

我想知道您是否可以向我們詳細介紹這種處理器業務的單位和 ASP 定價趨勢。我確信你不能給我們工具，但也許可以給我們一個百分比，然後只是想回到國際管道的弱點。聽起來像是中國或亞洲和歐洲的問題，我認為 SARS 可以解釋亞洲的問題，但如果你能詳細說明為什麼你認為歐洲在第二季度經濟放緩，那將會很有幫助。謝謝。

Okay. Let's see, trying to remember your other question. The first question was the ASP and unit differences from quarter to quarter. I can tell you that unit shipments in were actually down, and A -- was down slightly although to a lesser extent. As far as what we can see relevant to PC consumption, our actual consumption was down a little bit as well. Particularly we were hit hard in Asia and Europe. You can relate some of that to SARS in that we had somewhere in the neighborhood of 50% share of what they called the DIY, which is basically the small market in china. That certainly had a big impact on our business there, although in total numbers, the actual revenue hit was bigger in Europe. We had a much larger share -- a much larger numbers in Europe to start with. Europe was sit hit hard for a couple of reasons. Part of it, one of the largest markets from a PC standpoint in Europe is Germany and the German economy still is going through difficult times. We saw substantial shortfall to our expectations there, and in general, you expect Europe to slow down as you enter into the summer quarters. After you take -- you take it a little sooner than expected. We're hoping that we see a rebound coming out of those quarters coming faster as well, yet to be seen. I don't want to hang our hat on that, but looks like there is an opportunity there.

好的。讓我們看看，試著記住你的另一個問題。第一個問題是季度間平均售價和單位差異。我可以告訴你，單位出貨量實際上下降了，而且 A 略有下降，儘管下降幅度較小。就我們所看到的與 PC 消費相關的情況而言，我們的實際消費也略有下降。特別是在亞洲和歐洲，我們受到了嚴重的打擊。你可以把其中的一些情況與 SARS 聯繫起來，因為我們在所謂的 DIY 市場（基本上是中國的小市場）中佔有大約 50% 的份額。這無疑對我們在那裡的業務產生了很大的影響，儘管從總體上看，歐洲的實際收入損失更大。我們的份額要大得多——首先在歐洲的數量要大得多。歐洲因多種原因遭受重創。其中，從個人電腦的角度來看，歐洲最大的市場之一是德國，而德國經濟仍在經歷困難時期。我們發現歐洲的銷售情況與我們的預期有很大差距，總體而言，隨著進入夏季，歐洲的銷售成長將會放緩。服用後－你會比預期的服用時間稍早。我們希望看到這些季度的反彈速度更快，但目前還不得而知。我不想把我們的希望寄託於此，但看起來那裡有一個機會。

Okay, then just one quick final question on the inventory. It looks like inventory of processors is at healthy levels, but your inventory on your books looks like it ticked up slightly slightly. Are you comfortable with the inventory currently sitting on your balance sheet?

好的，那麼關於庫存，我只想問最後一個問題。看起來處理器的庫存處於健康水平，但帳面上的庫存看起來略有增加。您對目前資產負債表上的庫存感到滿意嗎？

Yes, we are. And one of the changes -- I like to ask Bob to elaborate as I finish here, we have been running the K8 family of processors or the so-called OPTERON and Athlon 64 for sometime, and we made the decision now that we're shipping product to actually put some value in that inventory, and a significant chunk of that was a result of evaluating that. Bob, do you have anything to add to that?

是的。其中一項變化是——我想請鮑勃在我結束前詳細說明一下，我們一直在運行 K8 系列處理器或所謂的 OPTERON 和 Athlon 64 一段時間，我們現在決定運送產品，以便真正為庫存增加一些價值，而這很大一部分是評估的結果。鮑勃，你還有什麼要補充的嗎？

No, I think Hector answered most of that. We're comfortable with our inventory levels. As Hector said, we take a pretty conservative evaluation posture on new products and not until we're shipping in some significant volume do we value that inventory. We value the hammer value of inventory in the third quarter and feel pretty comfortable with our inventory level and particularly comfortable with our inventory levels in the channel.

不，我認為赫克托回答了大部分問題。我們對我們的庫存水準感到滿意。正如赫克託所說，我們對新產品採取相當保守的評估態度，只有在我們運送大量產品時才對庫存進行估價。我們重視第三季庫存的成交價，並對我們的庫存水準感到相當滿意，尤其對我們的通路庫存水準感到滿意。

Great, thank you.

太好了，謝謝。

Our next question comes from the line of Hans Mosesmann (ph) Soundview Tech.

我們的下一個問題來自 Soundview Tech 的 Hans Mosesmann (ph)。

When is the ramp going to occur for -- and will it be 90 nanometer and will it be at the beginning and not .13 micron and then I'll have a follow-up, thanks.

什麼時候會出現這種上升趨勢——它會是 90 奈米嗎？它會在一開始而不是 0.13 微米嗎？然後我會進行跟進，謝謝。

Let me try to answer what I think the question is. Our joint development agreement with IBM is to design, to coalesce the company's road map at 65 nanometer. So beginning with the 65 nod (ph) nanometer mode, both companies will be on the same technology road map. What we've learned in working with IBM, which has been a positive experience, is that there is a lot that we could benefit mutually both companies. We actually started interaction at 90 nanometers not 65 only. So we have actually exchanged some technology modules, both companies, we picked up some of the pieces we're doing in some parts of our 90 nanometer effort and we're taking some of theirs, and as a result of that, we're ending up with a [inaudible] bust map.

讓我嘗試回答我認為的問題。我們與 IBM 的共同開發協議旨在設計並整合公司在 65 奈米方面的路線圖。因此，從 65nm（奈米）模式開始，兩家公司將採用相同的技術路線圖。與 IBM 合作是一次正面的經歷，我們從中學到了很多可以讓兩家公司互利互惠的東西。實際上，我們在 90 奈米處就開始相互作用，而不僅僅是 65 奈米。因此，我們實際上交換了一些技術模組，兩家公司都選擇了我們在 90 奈米技術研究中某些部分所做的部分，也採用了他們的一些部分，結果，我們得到了一張 [聽不清楚] 半身像地圖。

We're taking some of the risk out of that robustness in the technology, and we're beginning to run 900 nanometers. As we speak, we're beginning to run some product, and we're starting ramping that up towards the end of the year. We expect to make weaver production starts in the first half of next year.

我們正在消除該技術穩健性中的一些風險，並且開始運行 900 奈米。正如我們所說，我們開始運行一些產品，並將在年底前開始增加產量。我們預計明年上半年開始生產織布機。

That would be on Fab 30?

那會在 Fab 30 上嗎？

That will be on Fab 30, 200 millimeter, 90 nanometer.

那將在 Fab 30 上進行，200 毫米，90 奈米。

And the IBM65 nanometer will kick in 2005; is that correct correct?

IBM 65奈米將於2005年開始生產；那正確嗎？

That is correct.

沒錯。

Thank you.

謝謝。

Our next question comes from the line of Michael Masdea (ph) CS First Boston please proceed.

我們的下一個問題來自 CS First Boston 的 Michael Masdea (ph)，請繼續。

It seems like you guys have got your cash burn down, your growth margins going up and if you hit your Athlon64 on time -- is your next major step to focus on driving volume here?

看起來你們的現金消耗已經減少，你們的成長利潤率正在上升，如果你們按時推出 Athlon64，那麼你們的下一步主要措施是否是專注於提高銷量？

Big time, big time. We're redirecting a lot of the energy that we put in the past, with the downturn in the economy economy, things being slow for the last couple of years, we've put an awful lot of effort in reducing cost, restructuring how to run the businesses, and as I stated in my remarks, we're at the highest they will level we're been in years in the mark. Of microprocessors with a little wind in our sales and volume, we really have very optimistic out outlook for the future.

大時代，大時代。我們正在重新分配過去投入的大量精力，由於經濟低迷，過去幾年發展緩慢，我們投入了大量精力來降低成本，重組業務運營方式，正如我在發言中所說，我們正處於多年來的最高水平。由於我們的微處理器的銷售和銷量略有增長，我們對未來的前景非常樂觀。

All right, if you look at the mobile strategy, how important is getting tier 1, OEMs -- if it's not important, how feasible is a white book market?

好的，如果你看一下行動策略，獲得一級 OEM 有多重要——如果不重要，那麼白皮書市場有多可行？

Well, I think it's very important to get tier1, OEMs. I think one of the key stones to our strategy going forward is to be able to participate in a meaningful way in the enterprise commercial space of which mobile are a big part of it. Therefore a lot of our effort in looking ahead is making inroads in that arena. Short term, of course, we're going to do that with our products based on Athlon XG mobile. Longer term eventually will have the introduction of mobile pros and Athlon 64 and that's our agreement to eventually bring 64 bit computers to the enterprise all the way through the client. We expect that to have significant impact.

嗯，我認為獲得一級 OEM 非常重要。我認為我們未來策略的關鍵之一就是能夠以有意義的方式參與企業商業領域，而行動是其中的重要組成部分。因此，我們為展望未來而付出的大量努力正在這一領域取得進展。當然，短期內我們將利用基於 Athlon XG 行動處理器的產品來實現這一點。從長遠來看，我們最終將推出行動專業版和 Athlon 64，而我們的協議是最終將 64 位元電腦透過客戶端引入企業。我們預計這將產生重大影響。

All right, thank you.

好的，謝謝。

Our next question comes from the line of Chris Stanley with JP Morgan. Please proceed with your question.

我們的下一個問題來自摩根大通的克里斯·史丹利。請繼續您的問題。

Thanks, guys. Nice job on the margins. Just trying to look at the gross Marge b levels for the second half of the year. Can you talk about what your expectations are for utilization rates, how much you think the OPTERON ramp is going to help and flash pricing and how much that contributes to the margin boost.

謝謝大家。邊緣工作做得很好。只是想看看今年下半年的總利潤水準。您能否談談您對利用率的期望，您認為 OPTERON 的成長對快閃記憶體定價有多大幫助，以及這對利潤率的提升有多大貢獻。

I'll make some comments and maybe Rob can answer some of the market issues. But first of all, intuition is really the result of experiences that are accumulated over many years. My intuition says that business is getting better, that we expect to recover in the marketplace for the second half i.e., that results in higher involve, improving margins as the volumes go up, as revenue goes up, so we expect that our operations to continue to improve for the next couple of quarters. The challenge in the next quarter near term is to obviously assimilate this Fujitsu flash memory business effectively and be able to recognize that one of the reasons we find this exciting is there is an economic entitlement to this venture with Fujitsu, that we believe is going to be greatly beneficial, i.e., improving in operational efficiency as well as margins going forward. We expect pricing to continue to be competitive despite any modest recovery in the economy, both in processors and in flash memory. So our plan, going forward, are based on the continuing price pressures that you normally expect on this environment. Rob?

我會發表一些評論，也許 Rob 可以回答一些市場問題。但首先，直覺其實是多年累積的經驗的結果。我的直覺告訴我，業務正在好轉，我們預計下半年市場將會復甦，這會導致更高的參與度，隨著銷量增加、收入增加，利潤率也會提高，因此我們預計我們的營運將在未來幾季繼續改善。下一季的短期挑戰顯然是有效地吸收富士通閃存業務，並能夠認識到我們對此感到興奮的原因之一是與富士通的合作具有經濟權利，我們相信這將帶來巨大的利益，即提高運營效率以及未來的利潤率。我們預計，儘管經濟出現溫和復甦，但處理器和快閃記憶體的價格仍將保持競爭力。因此，我們未來的計劃是基於這種環境下通常預期的持續價格壓力。搶？

Yeah, from the market standpoint, Bob commented on how that affects margins. From the plaque pricing stand point, we see the market to be relatively stable, this doesn't mean prices are flat or going up, but they are staying in a normal pricing I guess. Over a year ago now, a tremendous amount of effort growing in our share of the wire wireless market. We've been very successful at doing that. If you look back 50 years, we doubled our flash density in the product we sent. As I think Bob mentioned in his comment, he had 7 consecutive quarters of good shipment growth. That was another record for us. So our progress in flash has been very, very strong, and we see a continued opportunity there, and particularly with our technology. (audio gap) It's on a ramp up. It's a major cellular manufacturer, so that helps drive the growth in that space as well. We're feeling good about the second half of the year, relative to the market opportunity and the combination of the consolidation. Fujitsu should help that.

是的，從市場角度來看，鮑伯評論了這對利潤率的影響。從牌匾定價的角度來看，我們認為市場相對穩定，這並不意味著價格持平或上漲，但我猜它們會保持在正常的定價水平。一年多前，我們付出了巨大的努力來擴大有線無線市場的份額。我們在這方面非常成功。如果回顧 50 年前，我們發送的產品的快閃記憶體密度增加了一倍。我認為鮑勃在他的評論中提到，他的出貨量連續 7 個季度保持良好成長。這對我們來說又是一個紀錄。因此，我們在快閃記憶體方面的進步非常非常強勁，我們看到了那裡的持續機會，特別是我們的技術。 （音頻間隙）它正在上升。它是一家主要的手機製造商，因此這也有助於推動該領域的成長。相對於市場機會和整合的結合，我們對下半年感到樂觀。富士通應該能提供幫助。

A couple of comments, in the flash business, we have two trends that'll help on the gross margin side, as volume continues to pick up. Higher utilization rates. We're not fully utilizing, as an example, Fab 25. Utilization rates will continue to pick up there, and also the transition and the technology nodes to 130 nanometer in Fab 25, and in JV3. So there's -- we've got multiple angles that continue to make gross margin improve on a continuous basis going forward.

有幾點評論，在快閃記憶體業務中，隨著銷量的持續回升，我們有兩種趨勢將有助於提高毛利率。更高的利用率。例如，我們沒有充分利用 Fab 25。那裡的利用率將繼續上升，Fab 25 和 JV3 也將向 130 奈米技術節點過渡。因此，我們可以從多個角度持續提高毛利率。

Give us a sense of margin contribution from the Opteron or how much better the margins will be there versus normal processors?

請您介紹一下 Opteron 對利潤的貢獻，或者與普通處理器相比，其利潤率會高多少？

We expect to obtain the appropriate compensatory effort for our OPTERON family, but as we said earlier, it doesn't have a significant impact in this year.

我們預計將為我們的OPTERON系列獲得適當的補償努力，但正如我們之前所說，它在今年不會產生重大影響。

Okay, thanks guys.

好的，謝謝大家。

Our next question comes from the line of Dan Scovel (ph) with Needham & Company.. Please proceed with your question.

我們的下一個問題來自 Needham & Company 的 Dan Scovel （音譯）。請繼續您的問題。

Yeah, good job on the cost savings there. Question in terms of flash memory. I was wondering if you can characterize sort of what's going on in the competitive environment there. You've given us a good flavor for sort of your approach and what you're doing in the market. I was wondering if you could help us make some sense. Clearly we've heard from major competitor there that they did well in Japan, but seem to do weak a lot of other places. And there's rumors of new entrance going in. I was wondering again, can you sort of qualify what the customers are looking for and maybe what some other regional shifts are that are happening in flash?

是的，在成本節省方面做得很好。關於快閃記憶體的問題。我想知道您是否可以描述那裡的競爭環境。您向我們很好地介紹了您的方法以及您在市場上所做的事情。我想知道您是否能幫助我們理解這一點。顯然，我們從那裡的主要競爭對手那裡聽說，他們在日本做得很好，但在許多其他地方似乎表現不佳。並且有傳言說有新的入口即將進入。我再次想知道，您能否明確說明客戶正在尋找什麼，以及快閃記憶體領域正在發生哪些其他區域性變化？

I'll make the comment on technology and Rob can comment on some of the market issues, but flash, you know, requirements for flash have become pretty stringent from a technology point of view. Being able to do what we do. ,We actually are taking it and doubling up, if you can say that that, on single transistor (ph) to store two bits of information, and the technology requirements where we're migrating rapidly already to 130 nanometer and pretty soon beginning to make the migration to 90 nanometers and beyond. Those are becoming pretty challenging for people that are participating in the high end, high performance, high density kind of technology. We see only a handful of companies, really, able to first of all have the core competency to do that, and the access necessary to produce them. There are only three or four companies --

我會對技術發表評論，Rob 可以對一些市場問題發表評論，但從技術角度來看，對快閃記憶體的要求已經變得非常嚴格。能夠做我們所做的事情。我們實際上正在將其加倍，如果可以這麼說的話，在單個晶體管（ph）上存儲兩位信息，而技術要求我們已經快速遷移到 130 奈米，並且很快就會開始遷移到 90 奈米及更高。對於參與高端、高性能、高密度技術的人來說，這些都變得相當具有挑戰性。我們看到，實際上只有少數幾家公司能夠首先擁有做到這一點的核心競爭力，以及生產這些產品所需的通路。只有三、四家公司——

And then there are small players addressing much smaller densities, very come moderate did I advertised -- some are too many and I expect some consolidation eventually to take place. The key point I wanted to make is the demand on technology from the fundamental building blocks as well as the design capabilities is pretty awesome. It's not something that's easy to come by. And then there is a market the customers and applications and all of them go into. Rob, will you comment on that?

然後還有一些小公司在處理更小的密度，正如我所宣傳的那樣，規模非常適中——有些公司太多了，我預計最終會發生一些整合。我想強調的重點是，從基本建置模組到設計能力對技術的要求非常高。這不是一件容易得到的東西。然後有一個市場，客戶和應用程式都會進入。羅布，你對此有何評論？

I'll try to follow up on the second part of the question, the geography. If you ask me what the customers are looking for, they are looking for a broad based supplier. They can supply product top to bottom, high dense, it density, high performance and AMD has the broadest product important portfolio in the industry.

我將嘗試跟進問題的第二部分，即地理問題。如果您問我客戶在尋找什麼，他們正在尋找一個基礎廣泛的供應商。他們可以提供從上到下、高密度、高性能的產品，而 AMD 擁有業內最廣泛的產品組合。

Secondly they are looking for a company that can provide them with ongoing cost reductions. We've done a good job of demonstrating the track record to do that. As Bob pointed out, the consolidation should allow that to continue as we go forward.

其次，他們正在尋找一家能夠幫助他們持續降低成本的公司。我們已經很好地證明了我們在這方面的成績。正如鮑勃指出的那樣，合併應該允許這種情況在我們前進的過程中繼續下去。

And third, they are looking for someone who provide them a road map for high density, high performance flash. This makes AMD distinguishable. They are the leader in high density, high performance flash product. As we look at the opportunities that affords us, we've seen pretty strong growth. Bob mentioned in his comments that we saw an offset of decline in sales in Asia. With an increase in sales in both North America and Europe. So pretty broad based. The only reason I don't comment on Japan is not because I don't think AMD can do well there, but remember, under the current arrangement, AMD did not have the opportunity to sell flash in Japan, that was handled in the partner, which is FUJITSU. We have an access to Japan as well and probably we can give you better guidance on what's going on there in the future.

第三，他們正在尋找能夠為他們提供高密度、高性能快閃路線圖的人。這使得 AMD 脫穎而出。他們是高密度、高效能快閃記憶體產品的領導者。當我們看到我們所面臨的機會時，我們看到了相當強勁的成長。鮑伯在評論中提到，我們看到亞洲銷售額的下降有所抵消。北美和歐洲的銷售額都有所成長。基礎非常廣泛。我之所以不對日本發表評論，並不是因為我認為 AMD 在日本無法做得很好，而是請記住，在目前的安排下，AMD 沒有機會在日本銷售閃存，這項工作由其合作夥伴富士通 (FUJITSU) 負責。我們也可以進入日本，也許我們可以為您提供有關未來在那裡發生的事情的更好的指導。

Also, in terms processors, can you comment on utilization of Fab 30?

此外，就處理器而言，您能評論一下 Fab 30 的使用率嗎？

The utilization of familiar 30, I would say for all practical purposes, fully utilized. But take into account that is going into technology transition have an incredibly rapid pace, as a matter of fact the 130 nanometer technology is going to be the shortest lived technology in the history of the world. It rapidly came and went, but taking into account the fact that there is technology changing and transitioning, the you utilization of weaver capacity is constant and pretty much fully utilized.

熟悉的 30 的利用，我想說，就所有實際用途而言，都得到了充分利用。但考慮到技術轉型的速度非常快，事實上 130 奈米技術將成為世界歷史上壽命最短的技術。它來得快去得也快，但考慮到技術不斷變化和轉型，織布機產能的利用率是恆定的，而且幾乎得到了充分利用。

Finally one last question on your non-windows compatible processors, kind of noticeable by its absence of comments here today?

最後，關於非 Windows 相容處理器的最後一個問題，今天這裡似乎沒有人對此發表評論，這是顯而易見的嗎？

(audio gap) I really think it's a positive part of our story too, although much smaller. You know, that business actually started with a fairly aggressive plan for the year, relative to revenue and an opportunity. And I have to tell you that they are actually ahead of plan, and I'll go on a smaller basis for quite different aside from processors. We continue to see a performance cost and power from the point of battery power, still being strongly positioned as a leader and gaining designs at a pretty healthy pace.

（音頻空白）我真的認為這也是我們故事中積極的部分，儘管規模小得多。您知道，相對於收入和機會而言，這項業務實際上是以一個相當積極的年度計劃開始的。我必須告訴你，他們實際上已經提前計劃好了，除了處理器之外，我還將在較小規模的基礎上進行相當不同的嘗試。我們繼續從電池電量的角度看到性能成本和功率，仍然佔據領先地位，並以相當健康的速度獲得設計。

But as we mentioned before, usually the time to market from design to product volume in this area, you're talking about argues such as automotive, and the GPS system in a car, people start planning their car model years in advance, so the time to volume on this thing is usually no less than 18 months, usually, even longer. So we expect those volumes to occur in the fourth quarter of this year. We will see some rather healthy significant volumes and much more next year.

但正如我們之前提到的，通常這個領域從設計到產品量產的上市時間，例如汽車，以及汽車中的 GPS 系統，人們提前幾年就開始規劃他們的車型，所以這個產品的量產時間通常不少於 18 個月，通常甚至更長。因此，我們預計這些產量將在今年第四季出現。明年我們將看到相當健康的顯著成長，甚至更多。

Thank you.

謝謝。

Our next question comes from the line of John Barton with Wachovia securities.

我們的下一個問題來自美聯銀行證券公司的約翰巴頓。

Yes, thank you. In terms of integration of Fasil , LLC, you commented that operating expenses will go up to $1 billion sequentially which would imply a $231m increase. Other than the organic growth driven could goes and you commented somewhere on 20% to 25% on the incremental dollar, is the complete balance of that $231m as a result of the integration of Fasil, and how do I compare that to the $180m revenue increase which would imply a loss versus the benefit that you've taken from the JV ventures in previous quarters. Thank you.

是的，謝謝。關於 Fasil, LLC 的整合，您評論說營運費用將環比增加 10 億美元，這意味著增加 2.31 億美元。除了有機成長驅動的因素外，您還提到了增量美元的 20% 到 25%，這 2.31 億美元的全部餘額是否是 Fasil 整合的結果，我如何將其與 1.8 億美元的收入增長進行比較，這意味著虧損，而您從前幾個季度的合資企業中獲得了收益。謝謝。

This is Bob. You've got the decode right. $180m additional sales, $200m plus of additional cost. Obviously that's our challenge, our entitlement is to go fix that on a go-forward basis. That's what we're working on currently in the third quarter to realize both top line opportunities and the cost synergies that are now available to us on a go-forward basis. It'll take us a while to work through those issues, and the statement we made on the billion dollar cost is for the third quarter.

這是鮑伯。您的解碼正確。額外銷售額 1.8 億美元，額外成本 2 億多美元。顯然這是我們面臨的挑戰，我們的權利是繼續解決這個問題。這就是我們目前在第三季所做的努力，以實現未來可獲得的收入機會和成本綜效。我們需要一段時間來解決這些問題，我們對十億美元成本所做的聲明是針對第三季的。

So by compare that to previous quarters, the gain you took as a result of your 40% exposure to the JV, I guess that implies that there is a costs that weren't showing up on the J JV is showing up in the income statement. Is that an accurate statement?

因此，透過與前幾個季度進行比較，您因對合資企業 40% 的投資而獲得的收益，我猜這意味著 J 合資企業中未顯示的成本出現在了損益表中。這是準確的說法嗎？

No. Before -- I mean, history, we had a 50-50 joint venture with F Fujitsu, in manufacturing, only in dye die manufacturing. Now we have a fully consolidated business unit from top to bottom that shows shares products to both parents and both parents distribute that product. It's 60/40 owned by AMD and 40 per by Fujitsu. So there is new cost and new people coming into the AMD umbrella and responsibility with 60% owner ship and the 60% trips it to full consolidation.

不。之前——我的意思是，歷史上，我們與富士通 F 公司在製造業有一家 50-50 的合資企業，只從事染料模具製造。現在，我們擁有一個從上到下完全整合的業務部門，向父母雙方展示共享產品，並且父母雙方都分銷該產品。其中 AMD 擁有 60/40 的股份，而富士通擁有 40 的股份。因此，新的成本和新員工將進入 AMD 旗下，並承擔 60% 的所有權和責任，而這 60% 的所有權將使其全面整合。

Excuse me for the incorrect percentages. If I look at the below the line item with respect to getting 40% back to Fujitsu going forward in the Q3 time frame, it will be a loss that you're sharing with them; correct?

請原諒我的百分比不正確。如果我看一下下面的項目，關於在第三季度期間向富士通返還 40%，這將是您與他們分擔的損失；正確的？

Correct. Correct. It will be the loss of the Fasil operation and we'll take 60% of it and Fujitsu will take 40%. And when it turns profitable, which we think is accretive in 2004 they will get 40% of the profit.

正確的。正確的。這將是法西爾業務的損失，我們將承擔其中的 60%，而富士通將承擔 40%。當公司開始獲利時（我們認為 2004 年公司將實現增值），他們將獲得 40% 的利潤。

Our next question comes from the line of Adam Parker with Sanford Bernstein. Please proceed with your question.

我們的下一個問題來自桑福德伯恩斯坦的亞當帕克。請繼續您的問題。

How much capitol captain capital spend something required to tool the flash in Japan. Your 10-K says $2.1 billion was required. You spent $1.6 I'm looking for a bit more color there.

在日本，製造閃光燈需要花多少錢。您的 10-K 報表顯示需要 21 億美元。您花了 1.6 美元，我正在尋找更多顏色的東西。

Well, one, we have capitalized on the get-go, which was effective June 30th, this month of June, I guess we're in July. The two parents have capitalized the new company appropriately, which included the $180 million of additional cash contributed by Fujitsu, to set up FASIL, LLC So we have think it has the capital assets and resources to afford the appropriate capital expenditures on a go forward basis to build out the capacity in JV3, in particular, which is where there is some expansion capabilities capability on a go forward basis. So we think we've capitalize the the business to handle that cash outlay. The capital expenditure numbers I gave you include the incremental second half of Fasil incremental expenditures.

嗯，首先，我們利用了從 6 月 30 日開始的這個機會，今年 6 月，我想我們已經進入 7 月了。兩家母公司已為新公司注資，其中包括富士通為成立 FASIL, LLC 而額外貢獻的 1.8 億美元現金，因此我們認為新公司擁有資本資產和資源，可以在未來承擔適當的資本支出，以擴大 JV3 的產能，特別是具備未來擴展能力的 JV3。因此我們認為我們已經利用業務資本來處理這筆現金支出。我給你的資本支出數字包括法西爾增量支出的後半部。

Can you break that out a little bit?

你能稍微解釋一下嗎？

The $725m is now total AMD, including the second half piece of FASIL.

這 7.25 億美元目前全部屬於 AMD，包括 FASIL 的後半部。

Can you hope with how much of it is for FASIL?

您能期望其中有多少是 FASIL 的嗎？

I guess the real answer is no no. We're not going to give you that that, because it's really a combination. Some of it was already in our original 650 as we've been working through ours, we continue to tighten our pencil on the 650. So some was in our number and then there is an increment. I would rather talk about that after the quarter is over from that perfect.

我想真正的答案是否定的。我們不會給你那個，因為它實際上是一種組合。其中一些已經在我們最初的 650 中了，因為我們一直在努力，我們繼續在 650 上精益求精。因此我們的數字中有一些是增量。我寧願在本季度結束後再談論這個問題。

Okay, switching gears. You guys commented a couple of times that the distribution in Asia and Europe were a little bit soft. How would you characterize your sales and inventory in the U.S. distribution channel during the second quarter and heading here in the 3rd quarter?

好的，換個話題。你們幾次評論說亞洲和歐洲的分佈有點軟。您如何看待第二季以及第三季美國分銷管道的銷售和庫存情況？

Actually, pretty well. If you look at Latin America was actually up almost across the board, whether it's OEM, resale, distribution, et cetera, et et cetera, et cetera.

事實上，相當不錯。如果你看一下拉丁美洲，你會發現它實際上幾乎全面上漲，無論是 OEM、轉售、分銷等等。

How about in the U.S.?

在美國怎麼樣？

U.S. was actually down a little bit, but above what we expected. The U.S. OEMs were stronger. Our business was relative three Lee flat, actually up a little bit, and our standard trade distribution business was down a little bit.

美國實際上略有下降，但高於我們的預期。美國原始設備製造商 (OEM) 實力更強。我們的業務相對持平，實際上略有上升，而我們的標準貿易分銷業務略有下降。

Are you expecting it to be up in Q3 along with your guidance?

您是否預計它會在第三季按照您的指導上漲？

Yes.

是的。

And lastly, a longer term question for Hector. You know, it looks like big round numbers by the end of the year, your revenue compensation will be close to 50/50 flash and processors. I'm looking out over the next three to five years, do you figure flash or processor business is going to grow faster from here an do you think either or both will go faster than the whole industry?

最後，我想問赫克託一個長期問題。你知道，到今年年底，這看起來像是一個很大的整數，你的收入補償將接近 50/50 的快閃記憶體和處理器。我展望未來三到五年，您是否認為快閃記憶體或處理器業務將從現在開始成長更快？您是否認為其中一個或兩者都會比整個行業發展得更快？

Well, first of all, on a very very, you know, just high level general picture, you're right. We're moving the company here in the near term to being roughly 50/50 flash in terms of revenue, 50/50 flash and microprocessor. We have chosen to participate in those segments and those pieces where we believe it has the largest potential for growth. In the case of processors, for the market in general, you've got OEM growth for example, may not look very attractive. We're aiming to be in segments where we don't participate at all.

嗯，首先，從非常非常高層次的整體情況來看，你是對的。我們將在短期內將公司業務遷移至快閃記憶體收入佔比約 50/50，快閃記憶體和微處理器業務佔比約 50/50。我們選擇參與那些我們認為具有最大成長潛力的領域和部分。就處理器而言，對於整個市場而言，例如 OEM 成長可能看起來不太有吸引力。我們的目標是進入我們根本不參與的領域。

So our expectation is that we will grow faster than the market for PC processors as a result of that. And the same thing on flash. Mainly there because we're going to be a leader. As we said before, that's a market maker and a market leader leader, we expect really benefit significantly from being on the high growth segment of the market.

因此，我們預計我們的成長速度將超過 PC 處理器市場。閃存上也存在同樣的事情。主要是因為我們將成為領導者。正如我們之前所說，這是一個市場製造者和市場領導者，我們期望從高成長市場領域獲得真正的巨大利益。

I meant absent of shared gains say I grant you the share gains in both segments for the sake of conversation, do you think processors as a business can grow faster than the overall semiconductor industry and the same for flash?

我的意思是，如果沒有共享收益，為了對話的目的，我承認這兩個領域的份額都有所增長，您是否認為處理器作為一項業務可以比整個半導體行業增長得更快，而閃存也是如此？

I think flash is an opportunity in the near term to be faster than the industry is much more cyclical. But let's say we've been on a downturn for flash for quite sometime. So it's very possible that in the near future, two years out, we might grow faster than the industry by industry, meaning the semiconductor industry. Processors, frankly, I don't know. We've been looking at modest growth in processors ref, if any any, over the next two years, and I as I mentioned earlier, our opportunity there is being able to participate in segments where we're not in today.

我認為閃存在短期內是一個機會，其速度比產業週期性更快。但是可以說，快閃記憶體的低迷狀態已經持續了一段時間。因此，很有可能在不久的將來，也就是兩年後，我們的成長速度會比各產業都要快，也就是半導體產業。處理器，坦白說，我不知道。我們一直在關注未來兩年內處理器參考市場的適度成長（如果有的話），正如我之前提到的，我們的機會是能夠參與我們今天尚未涉足的領域。

Thanks a lot for your insight insight.

非常感謝您的真知灼見。

Our next question comes from the line of Clark Westmont, with Smith Barney. Please proceed with your question.

我們的下一個問題來自 Smith Barney 的 Clark Westmont。請繼續您的問題。

Most myself questions have been answered, but I want to see see, is there a way to split that incremental cost, you know, the $200 million plus from the change in the flash share? Can you split that incremental cost between cost of goods and operating expenses?

我自己的大部分問題都得到了解答，但我想看看，有沒有辦法分攤這筆增量成本，你知道，快閃記憶體份額變化帶來的 2 億多美元？您能將增量成本分為商品成本和營運費用嗎？

I'll just give you a directional -- I mean, it's typical in the memory type business. It's very manufacturing oriented. So the bulk of the number is in manufacturing. More than 50% of it.

我只是給你一個方向——我的意思是，這在記憶體類型業務中很典型。它非常注重製造業。因此，其中大部分從事製造業。超過50%。

And in terms of trying to par back costs, is there opportunities on both the cogs and the operating expense side from that additional money or is there more one or the other?

在試圖削減成本方面，這些額外的資金是否對齒輪和營運費用方面都有機會，還是其中一方的機會更多？

Well, again, since most of the cost is manufacturing, obviously, it has a higher opportunity, but the opportunity is actually across the board. I mean, there are redundancies, as you would anticipate, in every category of the business, and that's what we're working through as we speak.

嗯，再說一次，因為大部分成本是製造成本，顯然，它有更高的機會，但機會實際上是全面的。我的意思是，正如你所預料的那樣，每個業務類別都存在冗餘，而這正是我們正在努力解決的問題。

Okay. And last question on flash, I think you've touched on this a little bit, but the flash improvement that you're expecting for the third quarter, excluding the $180 million addition, that is partly market share. Is it also handset unit driven? Are you seeing a pickup in both SARS unit demand for hand sets or could you help me out with that?

好的。關於快閃記憶體的最後一個問題，我想您已經稍微談到了這一點，但是您預計第三季快閃記憶體的改善（不包括 1.8 億美元的新增部分）部分是市場份額。也是由手機單元驅動嗎？您是否看到 SARS 期間手機需求量有所回升，或者您能幫我解答一下嗎？

Well, there are a number of things happening, maybe Rob can add to that what I'm going to say. First of all, the quarter to quarter improvement, there is no question that we believe that SARS in china will have a positive impact in the sense that flash for all practical purposes goes almost totally into consumer electronics products which are heavily affected be people walking into the streets and into the stores in places like China. Early in this quarter, we're seeing evidence that customers are heavily exposed to consumer electronics in china being somewhat more upbeat in the third quarter than they were in the second quarter. The other part is we do have technology and products that are going to allow us to gain share in the handset market, because we offered solutions and a value that our competitor cannot offer offer, so we will see a shared gain there, too. We're not anticipating any significant increase in handset units. As a matter of fact, we're taking a rather conservative view on the handset units type.

好吧，發生了很多事情，也許羅布可以補充我要說的內容。首先，就季度環比改善而​​言，毫無疑問，我們相信中國的非典將產生積極的影響，因為實際用途的閃存幾乎全部用於消費電子產品，而這些產品受到中國等地走上街頭和走進商店的人們的嚴重影響。本季度初，我們看到有證據表明，大量接觸中國消費電子產品的消費者在第三季度的情緒比第二季度略為樂觀。另一方面，我們確實擁有可以讓我們在手機市場獲得份額的技術和產品，因為我們提供了競爭對手無法提供的解決方案和價值，因此我們也將在那裡看到共同的收益。我們預計手機銷量不會大幅成長。事實上，我們對手機設備類型持相當保守的看法。

Okay. And I'm sorry, did I cut you off off?

好的。抱歉，我打斷你了嗎？

No, no, I just wanted to see if Rob had anything to add. Go ahead.

不，不，我只是想看看羅布是否還有什麼要補充的。前進。

Just wondering in terms of Intel, you know, they did make that pricing move earlier in the year that back fired. Is there any comments you have on that to mention? Has that ended up helping you? Or has is it kind of old history now.

只是想知道英特爾的情況，他們在今年早些時候確實採取了定價舉措，但結果適得其反。您對此還有什麼評論嗎？這最終對你有幫助嗎？或者現在它已經是一種古老的歷史了。

I was trying to be really nice and not bring that up. I guess my comment is clearly that was a tactical arrow. That was not looking at it from the customer perspective. I think, you know, it certainly created the opportunity for us and we're just now starting to see some of the benefit of the opportunity. We talked about growth in both Europe and the U.S Clearly that was because of some new opportunities in both our consumers commerce and people who are not customers of ours back before that happened. We're benefiting somewhat from that. But I think we're benefiting from the fact that our technology is starting to drive some opportunity share for us, and that's where I expect we'll see a good portion of our growth going forward.

我本來想表現得友善一些，不提起這件事。我想我的評論顯然是一支戰術箭。這不是從客戶的角度來看這個問題。我認為，它確實為我們創造了機會，我們現在才開始看到這個機會帶來的一些好處。我們談到了歐洲和美國的成長，顯然這是因為我們的消費者商業和之前不是我們客戶的人們出現了一些新的機會。我們從中獲益良多。但我認為，我們正受益於這樣一個事實：我們的技術開始為我們帶來一些機會，我預計，我們將在未來看到很大一部分成長。

Thanks very much.

非常感謝。

We'll take two more questions questions, operator.

接線員，我們還想回答兩個問題。

Our next question comes from the line of Mark Edelstein with Morgan Stanley. Please proceed with your question.

我們的下一個問題來自摩根士丹利的馬克·埃德爾斯坦。請繼續您的問題。

Good afternoon, guys. This relation again to flash. I guess the first question there is there a reason why Fujitsu is not taking half of the output in this last quarter and secondly, can you give us a general sense as to where you think you can take the break- break-even revenues to for the flash business going forward?

大家下午好。這段關係再次閃現。我想第一個問題是為什麼富士通在最後一個季度沒有佔據一半的產量，其次，您能否給我們一個大致的印象，您認為未來閃存業務的盈虧平衡收入可以達到什麼水平？

You know, Mark, I have to apologize. I don't think I got the first part of the question. Would you mind asking it again?

你知道，馬克，我必須道歉。我認為我沒有理解問題的第一部分。您介意再問一次嗎？

Yes, I would guess by the numbers that your providing that FIJITSU did not take half of the output. You said $211 million, it sounds like they are shipping something less than that. Was there a reason for that?

是的，根據您提供的數字，我猜測 FIJITSU 並沒有佔據產量的一半。你說的是 2.11 億美元，聽起來他們運送的金額比這還要少。有什麼原因嗎？

Okay, I'm going to, Rob is going to make comment here. You should not read that into those numbers. Prior to this creation of the company, the 50-50 joint venture in manufacturing allow both companies to have flexibility in their capacity and their number of reasons why that went back and forth, but you should not read into it anything other than that's how the -- that's how they set it up when we decided to join the companies and it makes sense for the joint venture to be 60/40, not because we were taking 60% of the product and they were taking 40% of the product.

好的，我要，羅布將在這裡發表評論。你不應該從這些數字中解讀出這一點。在公司成立之前，製造方面 50-50 的合資企業使兩家公司在產能方面具有靈活性，並且來回變動的原因有很多，但你不應該對此進行任何其他解讀，這只是當我們決定加入兩家公司時他們所建立的模式，合資企業的比例為 60/40 是有道理的，而不是因為我們佔 60% 的產品而佔他們佔 40% 的產品。

Yeah, as a matter of fact, Mark, I don't have a lot of -- we both took half of the output and get different revenue results. So I don't want to you to read too far into that. It doesn't have much to do with the numbers you are trying to refer to.

是的，事實上，馬克，我沒有太多——我們都拿走了一半的產出並獲得了不同的收入結果。所以我不想讓你對此有過多的解讀。它與您想要引用的數字沒有太大關係。

Isn't it possible that the $1 $180 million forecast you have for there, their contribution for you in Q3 would be conservative?

您預測他們在第三季為您帶來的貢獻為 1.8 億美元，這有可能是保守的嗎？

I'll let Bob handle it.

我會讓鮑伯處理這件事。

It's our best call. It could be -- we say it's approximate. It's not the real -- the final number, obviously, until the quarter is over, so it's our best call based on all of the information we know, from them as a customer and their end markets they serve.

這是我們最好的選擇。有可能——我們說這只是近似值。顯然，這還不是真正的最終數字，直到本季度結束才會公佈，因此，這是我們根據所了解的所有資訊（從他們作為客戶以及他們所服務的終端市場獲得的資訊）做出的最佳判斷。

The second question there was just on what you think the break break-even can be once you got a chance to get this under a better management overall?

第二個問題是，一旦您有機會在更好的整體管理下實現收支平衡，您認為收支平衡點能達到多少？

Mark, what we would like to do is we want something that is actually not thought of being possible. We concluded the whole thing just a couple of weeks ago, and we need to really spend a lot of time executing to what we think is possible, and being able to begin to access some range of possibilities to the synergies and the economic vitality of these units that we believe it has, and that's why we did this. I think we can provide you a much better data at the end of the third quarter.

馬克，我們想要做的是一些實際上被認為不可能實現的事情。我們幾週前才完成了整個事情，我們需要花費大量時間來執行我們認為可能的事情，並能夠開始獲取我們認為這些部門具有的協同效應和經濟活力的一系列可能性，這就是我們這樣做的原因。我認為我們可以在第三季末為您提供更好的數據。

Fair enough. If you guys had kept your days of inventory flat Q2 over Q1, what would the impact on gross margin have been?

很公平。如果你們第二季的庫存天數與第一季持平，對毛利率會有什麼影響？

I can do the math yourself, but we still met our $800m goal. So even though we did have some inventory billed, we valued the OPTERONS. We were south of our $800m goal. We hit the target, obviously a lot of our improvement, as you can see on the P&L, quarter to quarter was in gross margin, which is where we had additional cost reductions kick in both from cost synergies, re renegotiating contracts, et et cetera, et cetera.

我可以自己算一下，但我們還是達到了 8 億美元的目標。因此，儘管我們確實有一些庫存需要開立發票，但我們對 OPTERONS 進行了估價。我們距離 8 億美元的目標還很遠。我們達到了目標，顯然我們的許多改進，正如您在損益表中看到的，每個季度都是在毛利率方面，這是我們透過成本協同效應、重新談判合約等方式額外降低成本的地方。

Thanks for the details.

謝謝你的詳細資料。

We'll take one last question.

我們再回答最後一個問題。

Our last question comes from Tom Thornhill with UBS Warburg. Please proceed with your question.

我們的最後一個問題來自瑞銀華寶的湯姆·索恩希爾。請繼續您的問題。

Asked and answered, thank you you.

問了回答了，謝謝大家。

Well, thank you very much or participating in the call and we'll talk to you next quarter.

好吧，非常感謝您參加電話會議，我們將在下個季度與您交談。

That does conclude your conference call for fade today. We thank you for your participation and ask that you please disconnect your lines.

這確實結束了您今天的電話會議。我們感謝您的參與，並請您斷開線路。