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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (77474)	10/27/1999 9:44:00 PM
From: tejek	Read Replies (2) \| Respond to of 1573718

RE <<<You see, that's the false assumption. Let's assume this 600 MHz Athlon will be made on the 0.18u process. Assume it doesn't have any on-die cache on it (which will hurt performance, but cost is the issue here). The die size is still going to be close to 100 mm2. That can lead to a manufacturing cost of $40 to $50 per processor. If the selling price is $50 to $60, that's only a $10 margin per processor. That's a very poor margin for a company with limited manufacturing capacity.>> Yes, I agree with you but I don't think intc, let alone AMD, produces exactly the right number of chips to sell in the marketplace.....so I suspect there usually is a surplus which ends up getting dumped essentially for free. So I was figuring you could dump them for a price. But now that I see your point more clearly, I realized that won't work. Selling the Athlon the way it is right now would not make sense economically...its too costly a product to make.... besides its probably a lot more power and complexity than any playstation would need. What would be better is to come up with a much-cheaper-to-produce derivation of the Athlon. Or come up with a new chip altogether in which there is not a lot of design and prduction costs associated with it. Only in this way would it pencil out. And I think that is what you have been saying. Right? ted BTW what does happen to surplus chips? In essense, that processor has to be sold like a commodity. Sony's Emotion Engine is interesting in that it's trying to bring high-performance technology down to commodity levels, where Sony can drive the volumes and reap the profits from licensing fees. But it's not going to work that way for MS or AMD. AMD can't support the volumes and MS won't have the licensing fees (because of the open nature of the PC gaming platform). Did anyone forget why Athlon is generally considered to be AMD's last chance for glory? It's because the Athlon has the potential to drive AMD into the high-margin markets like corporate desktops, workstations, and servers. Why would AMD want to divert a significant chunk of their limited manufacturing capacity toward a low-margin Gamebox?

To: Tenchusatsu who wrote (77474)	10/27/1999 10:24:00 PM
From: Goutam	Read Replies (1) \| Respond to of 1573718

Tenchusatsu, <That can lead to a manufacturing cost of $40 to $50 per processor. If the selling price is $50 to $60, that's only a $10 margin per processor. That's a very poor margin for a company with limited manufacturing capacity There would be plenty of capacity by the time frame (Q4 of the Year 2000) that MS is looking into. What if it is $20 margin per processor, won't it change the picture dramatically? <But it's not going to work that way for MS or AMD. AMD can't support the volumes and MS won't have the licensing fees (because of the open nature of the PC gaming platform). > MS is going to use an hybrid OS of WIN98 and WIN NT. Besides, it's going to be their hardware. MS can add the licensing fees hook just by making recompilation necessary for the existing PC games to run on the game box. <Why would AMD want to divert a significant chunk of their limited manufacturing capacity toward a low-margin Gamebox?> Did you notice that you justified all the three point you made in your post based on the assumption of AMD's limited capacity by the fall of year 2000 ;^) regards, Goutama