Jim, your "explanations" of the IBM fab deal don't make sense:
a. AMDs yields aren't improving as much as they need and AMD is bringing on IBM as a security blanket.
If this was true AMD would be bringing on IBM right now.
b. AMD hasn't enough confidence in their yields so they are bringing IBM on as a security blanket.
This is the closest you come to the truth. AMD has confidence in their current production of K6 (0.35), K6 (0.25, mostly notebook) and k6-3D (0.25). BUT, in 3rd quarter they will be doing wafer starts on the K6+3D, a much larger die containing a lot of SRAM (though not as big as the 0.35 K6). To maintain four assembly lines and two process technologies in one fab is risky. AMD has stated that all wafer starts would be 0.25 in 2H'98. IF THIS IS TRUE THEN WHO'S GOING TO MANUFACTURE THE 0.35 K6, DUMMY??? Guess who, IBM. AMD may even be selling equipment to IBM from their current K6 production line, who knows? And I would guess that IBM will also be preparing to manufacture the K7 using their copper technology.
c. AMD anticipates demand they can't meet (due to low yields) so they are bringing on IBM...
Same as "a"
d. AMD wants to keep IBM as a customer so it's letting them have chips for the cost of manufacturing
IBM already had the right to package the AMD wafers, use its name on the chips, and it had a sweetheart pricing deal. Chances are, that agreement expires 7/98. So, one aspect of the new agreement is that it is replacing the existing one. The fact that IBM will be making the wafers as well shows that IBM not only thinks the K6 is "package-able", but that the K6 is now "manufactureable"
e. yeah right
f. AMD wants to get in on IBMs copper technology and maybe learn of IBMs superior process technology.
I agree, this is probably part of the deal, especially for the K7.
One further reason for the deal you do not mention is that it makes it easier for AMD to get new customers, such as Dell, Gateway.
Petz |
