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

To: Petz who wrote (33678)	6/29/1998 4:06:00 PM
From: Time Traveler	Respond to of 1583478

Petz, it is funny that are saying depreciation is not part of COG (cost of goods). Yet, the following link shows COG as $424M which includes $117M of depreciation. sec.yahoo.com Whether depreciation is part of the wafer cost or not, depreciation is a part of COG. As a pion system engineer, you might want to consult with a power financial analyst first before slashing down on some one who has started many semiconductor companies in the past. Time Traveler

To: Petz who wrote (33678)	6/29/1998 5:43:00 PM
From: kash johal	Respond to of 1583478

Petz, I was talking about effective wafer cost or total wafer cost. I certainly do not back away from my wafer cost statement, I thinks it fairly logical. With regards to AMD's wafer yields, I guess no-one knows. Typically these complex yield problems are fairly subtle, and I would be surprised if they ramp up immediately from 10-20% of ideal yield to 90% of ideal yield in a matter of few months. It just takes a while to find the needles in the haystack. I really am not a financial analyst, and I was not speaking as a financial analyst and could not tell you what a financial analyst looks at. Regards, Kash

To: Petz who wrote (33678)	6/29/1998 7:13:00 PM
From: Yousef	Respond to of 1583478

John, Re: "Kash johal, your post below reveals your total ignorance ... Yield doesn't affect cost per wafer, it simply takes more wafers to produce the same number of CPU's if yield is low. Your ignorance is showing." Petz, you shouldn't be so quick to refer to people as ignorant ... Let me point out a problem with your "analysis". The Fab's that I have been involved with include equipment depreciation in there COS (Cost of Sales) while Fab depreciation (Land and Building) occurs in a different accounting way. My point is that equipment depreciation does show up in wafer cost. This is one big reason that wafer cost is so closely tied to wafer throughput. One could argue that for a "demand constrained" Fab (like one that sells 1.5M K6's each quarter), better yield will reduce the number of wafers needed and thus increase wafer cost ... Now I know that there will be some savings in variable costs (chemicals, materials ...) that will lower the wafer cost somewhat. But my point is that wafer cost is to first order driven by equipment depreciation and wafer throughput ... another way to look at it is by equipment utilization (simply ... throughput divided by capacity). Please see my previous posts --> Message 4943871 Message 4943931 Actually, I think Kash has a pretty good understanding ... Make It So, Yousef