Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Joey Smith who wrote (34455)	7/14/1998 12:47:00 PM
From: Maxwell	Read Replies (3) of 1574470

Joey: <<Maxwell, I agree with you that cost of Mendocino is the key. I'm betting the farm on Intel that costs will be low enough, so profit margins will rise, not fall, 2H98.>> I hope you know that it takes about 3 months to ramp the Mendocino. Also Intel margin will rise due to Xeon not Mendocino. Why? The reason is that Xeon is target for corporate and high end users and they have money to buy it. Mendocino would be a mistake if Intel wants to target low end users. Why? The die size is so big that even with good yield Intel can't get many dice per wafer compared to the PII. As a result it is a tough market to compete with the K6-2 or the K6-3 where the dice are 20%-60% smaller. The bottom line is that can Intel grow in revenue. In the investor eyes, cutting cost to improve margin is just not like increase in profit from revenue increase quarter to quarter. You know what I mean. Maxwell

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