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

To: Scumbria who wrote (34382)	7/13/1998 8:28:00 PM
From: Jim McMannis	Read Replies (2) \| Respond to of 1576866

Scumbra, RE":Scumbria, RE:"Jim, With good yields, it ought to cost AMD well under $50 to manufacture a K6 on .25u. I don't understand how they could possibly be losing money if their yields are good. The fact that AMD's capacity is greater than their demand, does not necessarily indicate that they have good yields or reasonable production costs. Scumbria" I can easily answer your question but I'm going to do it via E-mail. Jim

To: Scumbria who wrote (34382)	7/14/1998 3:07:00 PM
From: Petz	Read Replies (3) \| Respond to of 1576866

Scumbria, re:<With good yields, it ought to cost AMD well under $50 to manufacture a K6 on .25u> Intel average selling price is something like $180 and their gross margin is 50%, so it costs Intel $90 to make a CPU. Clearly the key to AMD profitability is 1. Increasing volume, since this is basically a fixed cost business 2. Narrowing the speed grades Item 1 is a given, since over half of 2Q production was on 0.35 micron and that has ended Item 2 is less clear, but eliminating sales of 200 and 233 MHz chips below cost should help a great deal. Petz