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To: hpeace who wrote (12610)	1/3/1998 11:41:00 PM
From: ed	Read Replies (1) \| Respond to of 97611

Steve: I think you realize that there are several factors will have impacts on AMD's die cost: 1) the yield. 2) The equipment depreciation 3) the technology (die size) Let say based on a 75% wafer sort yield, INTC's cost per die is $65 for PII 233 Mhz die , let assume AMD and INTC are exactly the same as far as factor 1) 2) 3) are concerned, so if INTC set the PII 233 Mhrz price to be $100, then AMD can only sell for $75 for similar chip, Since AMD's die cost is $65 (assume the same as INTC, but in reality it is not), if we add up $25 per chip for package and testing, then AMD's cost per chip is $90, so each Chip AMD sold, AMD will lose $15, that is why I said, based on AMD and INTC's current strategy, the MORE AMD sold , the more it will lose. That is another weason I said before AMD may file bankruptcy in 1998 or 1999. I do not think any company can lose like this for long, especially for company like AMD which need to invest a lot in FABs and R & D to compete but with a shallow pocket !!!!!! I think AMD 's yield probably is much worse han 75%, maybe 30% to 50% !!!!!!!!!!!!