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Politics : Formerly About Advanced Micro Devices
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To: Petz who wrote (29382)3/4/1998 2:14:00 PM
From: Aaron Cooperband  Read Replies (2) of 1574005
 
John -

Re: "It requires a lot less of AMD's cash to pay IBM $2000 to $2500 per wafer for K6 CPU's than it does to purchase additional lines of capital equipment for Fab 25."

AMD is selling a low margin product and must pay for double depreciation and SG&A expenses, as well as for IBM's profit margin. On top of this, they don't control their sales prices, their competitor does.

Step back from the numbers for a moment and use your common sense. If you think they can make money in this situation, I think you're dreaming.

Aaron
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