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Politics : Formerly About Advanced Micro Devices
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To: Cirruslvr who wrote (77981)10/31/1999 12:02:00 AM
From: Paul Engel  Read Replies (2) of 1575629
 
Cringe - re: " So when Intel's new fabs begin to use 300mm wafers, Intel will have an even further CONSIDERABLE cost advantage over AMD which will allow Intel to have even more competitive prices."

That is 1000% Correct - assuming the 300 MM wafer fab & process come on stream according to "plan".

Roughly speaking, each 300 MM wafer will have 2.25X the number of equivalent die on a 200 MM (8 inch) wafer. Raw wafer costs will probably double but that represents only about 5 to 10% of the overall processing costs/wafer.

Of course, the cost of entry will be enormous - my guess is $2.5 to 3 Billion for a 300 MM wafer fab, Copper process, 0.13 micron - from the ground up.

Re: "If AMD wants to stay competitive with Intel, my guess is they will have to build ANOTHER fab. Intel's Fab 16 is expected in 2002 according to that News.com article, so giving Intel the technological lead, I would guess AMD would need a FAB like that of their own within a year. "

AMD is sitting on $1.5 BILLION of debt righ now and losing money every quarter. Dresden will be an enormous OVERHEAD expense - eating up even more costs - direct and indirect and overhead. AMD cannot afford another wafer fab especially in view of the $2.5 to $3.0 Billion cost.

At best, AMD will have to depend on an outside foundry - or take on a partner - to survive at that stage of the game.

Re: "it took AMD 2 years to make their current Fabs and however much longer from first silicon to first production (about 1 year according to the Dresden link). So if AMD is to remain competitive with Intel they may be thinking of making another fab right NOW. Of course another Fab will put even more considerable weight on AMD's financial shoulders which have sagged for such a long time. And it will also RAISE AMD's breakeven point which is already raising with Dresden depreciation"

Now you are beginning to see the TRUE position - and condition - AMD is in.

Just having an AthLON CPU is nowhere near enough to insure their future success.

All those years of losses cannot be erased in one or two quarters - especially in view of the fact that AMD's main competitor has been putting $1.2 to $2.0 BILLION dollars in its piggy bank EVERY QUARTER for the past 12 or 14 quarters - and that's a lot of JACK !

Re: "So according to AMD, production will begin this Q, but they won't get money from the processors until Q2 next year. I thought it took 90 says from wafer start to the processor being ready?"

I believe Jerry said Dresden wouldn't impact AMD's bottom line until H2/2000 - making that Q3/2000 at the earliest. And that is 9 to 10 months away !

Paul
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