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Technology Stocks : General Lithography
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To: Proud_Infidel who wrote (1161)2/12/2000 2:46:00 AM
From: Andrew Vance  Read Replies (2) of 1305
 
The margins on a CPU are much higher than that of a DRAM. Name one other chip that is more expensive than a high end microprocessor. GM is based on the ASP you can get and what the market will bear.

Cost Effectiveness and Cost of Ownership are based on Wafer Cost (the cost to manufacturer the wafer), and not the revenue you make off the wafer, which drives GM. I think wafer cost is the true measure of a fab. I can say with almost certainty, that INTC could not compete in the DRAM market with the equipment they have and the large depreciation expenses of their fabs. If not for the price they can get for their processors, they could not be competitive with many of the ASIC manufacturers.

Private email me if this answer does not satisfy you and I will go into greater detail.

AV
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