Re: Do you really think that 146mm^2 will become a competitive disadvantage for Intel? With two more 300mm wafer fabs yet to come online, it's not like they will be short the capacity in 2002
The curious thing is that Intel is better off with capacity limited, as it was this past quarter, than it will be when it has more plant on line. Intel is desperate to take back the share it has lost to AMD, and would ship more processors, at almost any price, if it could produce more.
Later in the year it will be able to produce more, and it will cut prices until it can can regain share. The thing is, to get AMD share down, Intel will have to keeping driving its ASPs down. With the administrative, personnel, energy and material costs of running 6 FAB equivalents dedicated to CPUs, vs. 4 this year, plus the ongoing costs of keeping the equipment in all of them up to date, Intel will have some heavy costs next year.
AMD plans (will it work out? We'll have to wait and see) to produce more CPUs from one FAB this year than it did from 1 1/2 FABs last year. Given a die size dropping from 129mm2 to 80mm2, that doesn't seem unreasonable. AMD looks like it is shooting for a breakeven at ASPs in the range of $60. AMD expects to make some money next year, but not lots. If Intel achieves double AMD's ASPs, say $120, here's how it might play out.
Q3 2001 27.5 million sold * $150 ASP = CPU revenue of $4,125 and earnings of $200 million.
Q3 2002 35 million sold * $120 ASP = CPU revenue of $4,200. Costs, however would increase by a significant amount ($1 Billion?), causing Intel to make its first GAAP loss in many years. |
