Hi Albert,
Margins are influenced by lost of things, but yields direcly affect the bottom line. IMHO, when INTEL starts production of a new chip, they have a pretty good idea of what production yields will be from data gathered during the design builds. They use this to set a price on the chip, probably factoring in future yield enhancements and historical yields, as well as other data. However, once production begins, if yields slip, it's costing you more now to produce that chip because your'e throwing away more than what you originally planned for. If you improve your yield over the original target, your gross margin increases because your now shipping more units than planned.
BTW, I'm not saying INTEL does'nt have yield problems, or that they never happen. Sometimes they are ongoing, but with good engineering (which Intel has) these issues are resolved quickly, before they start draining your profits. I percieved Chuckie's statement to say thet Intel had ongoing yield issues that weren't solved, and negatively impacting their operation. That I don't believe to be true.
Paul |
