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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (146490)	10/31/2001 3:43:01 PM
From: fingolfen	Respond to of 186894

It sounds like someone at JJ added the 50% cost reduction expected from the shrink from .18 to .13 and less costly packaging to the 30% cost reduction expected for 300mm - which, of course, is the wrong way to do it. I agree... that's absolutely the wrong way to do it... They should have multiplied .5 x .7 to get a cost of 35%, which is only a 65% expected reduction in costs, not 80%. That's not any better, though... It does not take into account the cost curve for a process generation and assumes that a cost per wafer is fixed across a technology lifetime... which it isn't. Processes are always most expensive in their first year of full production, and gradually drop over time. The fact that they're now forecasting a 25% reduction instead of a 65% reduction is surprising - perhaps they're taking into account the more than doubling of the size of their average die (on a given process) due to architectural changes in the processor lines. Could they mean that a .13 P4 on 300mm wafers with less expensive packaging and automated wafer handling will cost 25% less than a .18 PIII using the old-style, expensive, packaging and wafer transport "by hand?" Intel's never advertised 65% savings. This should be a clue that there is something wrong with your analysis.