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Technology Stocks : Intel Corporation (INTC)

INTC 48.80

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3:59 PM EST

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To: Time Traveler who wrote (23664)	6/2/1997 11:54:00 PM
From: Patient Engineer	of 186894

>I would like to see your calculation of $80/chip cost to K6, if you >don't mind. If Albert won't I will, but I'm afraid I don't completely agree with the $80 number. Wafer cost is $2500. Even that great AMD fan Paul E. agrees that this is a reasonable estimate. Gross die per wafer are 145. Assume a defect density in the 1 per cm2 range (not real great, but it is a new process, expect it to improve significantly over the next few months) and you get a yield of around 25-30% or around 40 chips per wafer. This gives a die cost of around $65. The ceramic substrate used in the K6 package can be had for less than $10. Being a gang bond process, yields are very high through assembly. Tack on $5 for assembly and test handling and you get $80. Costs will quickly fall below this level as yields improve toward the 50% level that would be expected for a device of this size.

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