Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 217.54

+1.6%

Nov 28 12:59 PM EST

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To: Sarmad Y. Hermiz who wrote (201270)	6/9/2006 12:47:12 AM
From: hammerfall_prophet	Read Replies (1) of 275872

>You know where I'm going with this. Is it reasonable to say that AMD will not get the cost savings from 300mm during this year ? or is there some other factor that allows AMD's fab 36 running at avg 50% for a year to be a great asset, whereas Intel's fab xx running at 50% for a year to be a disaster ? The answer is pretty simple: While a fab is ramping up, not all the equipment is in place. Consider operational costs: The land, the building, workers' salaries, etceteras are spit in the bucket compared to the typical 2 billion + in equipment, a capital investment whose equivalent rate of return may run up to 100 million a year. Slowing down an already ramped fab could therefore cost 50 million in cost of tied up capital.

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