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Technology Stocks : 3DFX

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To: Hal Rubel who wrote (5374)7/15/1998 4:11:00 PM
From: Obewon  Read Replies (2) of 16960
 
Hal, nice try but your numbers don't take into account that it is not the profit lost that matters on bad chips but the entire cost of the chip. Therefore you should divide the $200,000 by approx $37.50 and get around 5,300 chips.

More to the point the $45 cost you mentioned is for post production large volume orders. Individual chips and run costs far exceed this. I would guess that put a design to into silicon initally cost over $10,000 per design. Just look at the company's R&D spending to get a better idea of how important the $200,000 investment will be.

OB
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