Jason - Re:" I understand your desire to discredit AMD...."
On the contrary, Jason. You made certain statements regarding AMD's capabilities which were in complete factual error! I merely corrected those errors with the facts.
In no way did I ever mention that AMD's engineers were incompetent. These are your words and they come from your mouth (or keyboard, not mine). However, the fact remains that their (AMD) much touted, internally developed K5/K6 programs produced very uncompetitive devices, resulting in the abandonment of their internal K6, the very late delivery of their K5 (and at very slow, uncompetitive speeds).
Jerry Sanders acknowledged these gaffes in his Q2 and Q3 earnings reports, trying to explain AMD's losses while his main competitor was racking up record profits.
Now, let us dwell on the NexGEN K6 purchase. AMD spent initially $600 - $800 million for this company. As you noted, they have had to expend additional resources to finish up the design and tweak their fab proces to make it.
AMD mandated a Pentium Pin Out, so the first order was a redesign to that effect - eliminating the direct L2 cache data bus (as used on the NexGEn 586 and Pentium Pro). AMD was aware of the initial NexGEN 686 design/architecture at the time of purchase and acknowledged this.
I would assume (and it is only my assumption) that AMD new the NExGEN 686 was designed on IBM's 5 layer metal (plus local interconnect) process. AMD would have to modify their 0.35 micron process for this, or else effect a complete re-layout of the NexGEN 686 to meet AMD's 3 layer metal , 0.35 micron process.
A further discussion of the $600 - $800 million purchase is required. When Intel shipped their first Pentium, they detailed that the cost of design, development, simulation, debug, testing, process development, etc. consumed over $100,000,000 . This astounded the industry at the massive amount of resources Intel could expend for this one product.
Let's assume they "doubled" that expense for their Pentium Pro - $200,000,000. Let's also assume that Intel incurred expenses of $75,000,000 and $50,000,000 for their 80486 and 80386 development, respectively.
The sum total for all these product developments (80386 through Pentium Pro) would be $425,000,000.
That places AMD's expenditure of $600 - $800 million at least $175,000,000 MORE than what it took Intel to develop every generation of x86 processor for the past 10 years! That is a phenomenal amount of money! Jerry Sanders is outspending Intel by hundreds of millions of dollars, on average, for processor development!
Now - back to the K6 - it will have to be VERY MUCH BETTER than the Pentium Pro, by a wide margin, for AMD to regain this investment.
Paul |
