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Technology Stocks : Intel Corporation (INTC)
INTC 39.50-3.1%Dec 11 3:59 PM EST
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To: wanna_bmw who wrote (169346)8/13/2002 10:56:16 AM
From: Yousef  Read Replies (4) of 186894
 
BMW,

Re: "I don't get it. What is fundamentally better with the foundry model?"

The benefit to the foundry model is for smaller companies that cannot afford
the "huge" capital costs (~3B$) to startup and outfit a new 300mm Fab.
These companies also gain some "flexibilty" in upside/downside capacity
adjustments that used to cost them dearly. An idle Fab can bring a small
company to "its knees". But as with most things, there are some negatives as well:

1) AMD will be at the foundry's schedule for process development. Right now
they are about one year behind INTC.

2) From what I have seen and experienced, foundries are very good at
delivering wafers for products that don't stress the performance of their
process. They are NOT good at delivering OR tuning their process to
achieve high performance parts. This is where I think AMD will suffer severely.
As you and many others know, the design and process need to be "tuned" together
to obtain highest possible performance and highest bin yields. In the foundry
model, performance will have to be "left on the table" because of the
foundries inability to tune their process for all customers needs.

3) AMD will be just one voice of many when making requests for special
processing or need for "hot lots" or anything else.

I have worked with the top 3 foundries (TSMC/UMC/CHRT) and have experienced
all three of these problems. I have also worked with INTC on process development
and I can confidently say that INTC has much higher expectations for
yield (defect density) than any of these foundries.

Make It So,
Yousef
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