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Politics : Formerly About Advanced Micro Devices
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To: Saturn V who wrote (45496)1/11/1999 8:26:00 PM
From: kash johal  Read Replies (1) of 1572102
 
Saturn,

>Re: Kash, you and John are making crude assumptions and arriving at >wild conclusions. You guys made a wild guess that Intel entire >depreciation expense is for Wafer Fab equipment alone, as if there >no other equipment to be depreciated. What about chip assembly >plants and cartridge assembly plants and test plants ? Remember that >a microprocessor tester costs almost two million dollars, has a >useful life of a few years. Thus it costs $10+ to test a part ,and >most of it is all depreciation expense.
>Given Intel's economy of scale, I wont be surprised if Intel's wafer >cost is significantly below $2000 even after depreciation.

FYI, the testers probably cost much more than $2M - more in $5M range due to high pin counts.

As you correctly point out these are useful for only a FEW years.

They are depreciated over 10-15 years.

The test costs on the CPU's however are in the $1-2 range NOT $10.

Jeez, talk about somebody making WILD Guesstimates.

The BOTTOM LINE is that there is a hidden depreciation that Petz was not figuring on.

THIS IS NOT ONLY INTELS PROBLEM.

This is a problem for ALL the semi guys to varying extents.
It's just exagerrated for Intel due to the fact that has to use leading edge equipment to stay ahead.

Regards,

Kash
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