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Technology Stocks : AMD:News, Press Releases and Information Only!

AMD 214.90

-0.1%

Dec 26 3:59 PM EST

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To: AK2004 who wrote (1020)	10/7/1997 12:18:00 AM
From: Patient Engineer	of 6843

Albert, Re:"what would be your estimate of the cost of k6 at 20% yield on .25um vs 50% at .35?" The cost used for accounting purposes could be all over the map depending on what accounting policies AMD chooses to make. From a cash flow perspective, however, for capacity that is in place, you can think of a .35 micron and .25 micron wafer as costing roughly the same (same building, same amount of electricity, chemicals etc.). So what really matters is yielded die per wafer. The .25 micron wafers appear to yield roughly the same number of good die as do the .35 micron wafers, so the cost is the same. The accounting policies can really screw you though. AMD could be sitting on a bunch of capital that won't work its way into COGS until the process is released for production. This would result in the .25 micron wafers "costing" much more than the .35 micron wafers even though they don't cost any more from a cash flow perspective. One can hope that the reason AMD is showing a loss this quarter is that they are absorbing those costs all at once, but we've had these hopes before only to be disappointed.

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