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Technology Stocks : AMD:News, Press Releases and Information Only!

AMD 233.54

-1.8%

Nov 7 9:30 AM EST

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To: Petz who wrote (6512)	6/3/1998 12:43:00 PM
From: Larry Loeb	Read Replies (1) of 6843

John, So why do AMD and Cyrix continue to lose money Its called "predatory pricing" by DOJ Actually, it seems to be more a problem of manufacturing yields, which are - as I believe you know - a critical part of the expense equation. If, as we have been led to believe, AMD was only yielding 2 to 5 good die per wafer, their costs were over $1,000 per good die, on a variable cost basis (forgeting overhead charges). When you sell those die for $300 or less, your going to lose money (and may be accused of predatory pricing). Until AMD gets control of its manufacturing process (which is rumored to have happened), they are doomed to lose money in the processor area. Competition in their other businesses hasn't helped either. Given the manufacturing prowess of Intel (which was not always the situation if you read Jackson's book), they are able to profitably sell chips at $75 (although the margins on those chips are pretty low). Larry

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