Lee - Re: Roughly speaking, could that plant then be worth 3.5 times as much in Intels hands than in AMDs, minus the cost to retool?"
It's hard to say what DEC's FAB was worth to DEC. The FAB did make ALPHA chips so it essentially kept them in the ALPHA system business. However, the amortized cost of the ALPHA chip must have been HORRENDOUS, eating into most of the profits of all but the largest ALPHA systems that DEC sold.
For Intel, assume that they will produce 3,500 wafers per week (eventually) - I believe the DEC Fab is little more than half the size of new Intel fabs.
3,500 wafers per week could easily generate $24,000/wafer assuming 120 good die/wafer (131 sq. mm) whcih sells for a mere $200 - these are low estimates for Deschutes chips at the low end of their life cycle at 0.25 microns).
That produces a sales stream of $84,000,000 per week.
Assuming 50% gross margins, or $42,000,000/week, the Fab could be substantially paid off (new equipment, upgrades + $700,000,000 cost) within 12 to 18 months, depending upon how long it takes to get up to full production. (Initial production rates will ramp slowly to 3500/week).
Re: "Could Intel use still more capacity after the DEC deal?"
They had better - or we're all in trouble!
Re: "Would AMD sell since they are not profitable?"
This is very doubtful, although not impossible. Jerry Sanders is on record for having said something to the effect "Real Men have their own Fabs" - he was, of course, referring to Altera and Xilinx, two little startup companies (in the 1980s) that used foundries to produce programmable logic that was competeing with AMD's MMI programmable logic acquisiton - now known as Vantis.
Of course, AMD's Vantis is now 5'th in programmable logic (and dropping) and Altera and Xilinx are numbers 1 and 2.
AMD has a precedent for selling excess Fab capacity. In 1990/91 they sold a relatively new 6 inch wafer fab that they had belt in San Antonio to Sony for $60,000,000 - about one tenth what it cost them to build.
Assuming AMD could get around the patent issues, they could conceivably go to a foundry service to have their K6's made = IBM Microelectronics, TSMC, Chartered Semi, etc. But this would be an ego deflater for Sanders - so it would only happen if AMD was about to turn a severe yield problem into a spiralling disaster - possible, but not proabable.
Re: "If IBM is going to buy the Merced chip, I wonder if they have any
manufacturing space they would like to get rid of?"
They will keep their own fabs busy.
One little known fact - IBM at one time had the rights to manufacture Intel's Pentium chip. At the time, IBM thought that they had developed their Intel Killer chip - the PowerPC. Intel called their bluff and negotiated to BUY BACK THE RIGHTS FROM IBM for the Pentium, which they proceeded to do!
The Intel person who accomplished this was duly rewarded for this coup!
Paul |
