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Politics : Formerly About Advanced Micro Devices
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To: Paul Engel who wrote (27001)12/21/1997 12:22:00 AM
From: Petz  Read Replies (3) of 1573221
 
Paul, re:wafer cost approach $4000 per wafer

Lets not confuse apples with oranges. None of the per-wafer costs we've discussed recently include depreciation for a Fab or even for the capital equipment in the Fab. Something in the range of $1500 to $2500 covers just the cost of purchasing the raw wafers, all the personnel running the fab, the heat, AC, electricity and chemicals. The has to be enough profit left over (this is called gross margin) left over to cover
1. Depreciation
2. R&D
3. G&A (General and administrative expenses)

In AMD's case, R&D is 21% of sales, compared with only 9% for Intel. If AMD had had 10% R&D, they would have had a profit every quarter of '97.

Petz
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