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Technology Stocks : Spansion Inc. -- Ignore unavailable to you. Want to Upgrade?

To: PChips who wrote (3876)	6/6/2008 6:48:09 PM
From: Petz	Read Replies (1) \| Respond to of 4590

re: in your opinion, how much revenue should a company generate from a 300mm wafer at 34nm process node to be able to generate a decent RoI of say 10% after taking into a/c depreciation? I'm no expert on wafer costs, but take a company like AMD, which was pretty much CPU only in Q2 of 2006 and profitable. They were probably pushing about 10,000 wafers per week and had cost of sales of 0.5B. Per wafer, that works out to cost (including depreciation but no overhead like marketing) of $3,846. I think memory chips have 1/2 the cycle time of CPUs, so that basically means you could get twice the output for the same cost in labor, materials and depreciation. So that's $1900 cost per wafer. Spansion needs about 25% gross margin to be profitable. Q3 2006 had 21% gross margin, and 25% would have resulted in a profit. Putting the two numbers together, it would take revenue per wafer of ~$2,400 to hit breakeven. But my analysis might be skewed by my 2:1 ratio of CPU costs to memory costs for an equivalent die area. If that is as high as 3:1, then $1,600 revenue per wafer could be breakeven. Petz