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

To: Petz who wrote (85914)1/7/2000 6:52:00 PM
From: kash johal  Respond to of 1572859
 
Petz,

Re: "R&D and depreciation"

Yes these are $40/chip plus.

This is why the accounting laws don't make sense for Intels model or AMDs.

They have to make very high margins in high end and basically lose money in low end - if R&D/Depreciation are counted.

The good news is that this BUILDS an INVISIBLE barrier to entry.

Now when VIA comes knocking with low end product both AMD/Intel can sell these parts at INCREMENTAL costs worst case.

Unfortunately VIA has to purchase wafers from TSMC/NSM/UMC. these folks will NOT sell wafers at incremental cost. Their wafers are at market price and include R/D/depreciation/S&GA/and even PROFIT. This makes it very difficult for someone to enter the market.

Just look at all the pain AMD had to endure to get a real margin product established.

IMHO good for AMD and Intel.

regards,

kash



To: Petz who wrote (85914)1/7/2000 7:40:00 PM
From: Greater Fool  Read Replies (1) | Respond to of 1572859
 
Twenty bucks in depreciation per CPU is too high. I think that part of the disconnect is that your depreciation is also including depreciation for non manufacturing equipment, such as for engineering.


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