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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Elmer Phud who wrote (138149)	10/29/2004 4:15:56 PM
From: muzosi	Read Replies (1) \| Respond to of 275872

so you're suggesting that their gm is higher than %60 in "other" things. i'd bet processors have the highest gm.

To: Elmer Phud who wrote (138149)	10/29/2004 7:29:42 PM
From: rsi_boy	Respond to of 275872

I know this isn't widely understood on this thread but Intel makes other things besides processors. my mistake 60% is (was) the range for all of intel, i was taking it for being that of Arch group. Intel obfuscates well the variable cost of manufacture. CPU GM could well be anything (and no doubt varies wildly by product type). It's all about the fixed costs anyway. how those cost get allocated depends on how much you can yield and sell. You;re probably right, the incremental cost per square cm of wafer is likely quite low. but maybe that's not the most salient figure. It's a fixed cost business. As long as AMD can A) maintain minimum efficient scale (admittedly getting harder w/ 300mm wafers but they are building one of those too) and B) have a competitive product line (wich they sure do) then they are protected from a price war. We could probably get a rough estimate of marginal (cpu) cost for AMD by taking a regression of COGS for cpu division relative to units sold over the last few quarters. anyone want to see if the numbers work?