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Politics : Formerly About Advanced Micro Devices
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To: Jim McMannis who wrote (33317)6/17/1998 12:55:00 AM
From: Time Traveler  Read Replies (1) of 1573824
 
OK, Jim, any attempt by anyone other than the inside personnel trying to estimate the cost of K6 through number of wafers in question is really a waste of time. However, one can guess at what the overall cost of K6 production. Here is how, in the past quarter:

- The management did hint that non-K6 business just broke even.
- K6 had ASP of $120 with 1.55M in volume.
- Total loss, before tax and joint venture revenue, was a whopping $106M

Now, we can calculate a K6-production fixed cost of $120 * 1.55M + $106M = $292M. Say $300M to keep two significant digits due to too many embarrassing assumptions.

AMD has to generate roughly $300M (plus a smaller amount with more volume and 0.25um capital equipment depreciation) of revenue in the K6 or K6-2 product just to break even this quarter.

Hope this sort of answers your question,
Time Traveler
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