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

To: Petz who wrote (48622)	2/5/1999 12:22:00 AM
From: Paul Engel	Read Replies (1) \| Respond to of 1572361

Petz - YOU Love these calculation scenarios ! Here's a good one you did - remember this one? Remember what the results ACTUALLY WERE ? Paul {====================================} To: Paul Engel (32681 ) From: John Petzinger Sep 26 1997 9:22PM EST Reply #32981 of 34149 Paul, Re: "they could lose money on every K6 they sell" 8" wafers 31400 sq mm, 162mm die size = 194 die/wafer 80% useable die vs theoretically possible die = 155 die At 40% yield = 62 die (I have on good authority that current yield is above this) AT 84% back end yield = 52 shippable die Average selling price $160 = $8,320 revenue per wafer Packaging costs = $2062=$1,240 Wafer cost = $2300 Gross profit per wafer = $4,780 At 3000 wafers/week = total of 2,028,000 K6's in quarter (the predicted minimum) Now, to estimate the fixed costs, AMD's revenue per wafer for the 3rd quarter was 26 shippable die $200 ASP = $5,200 or gross profit per wafer of 5200-620-2300= $2,280. Total gross profit for 3rd quarter=13 weeks 3000 wafers $2,280/wafer = $ 88.9M. Since quarter will have had a slight loss, fixed costs must be about $90M, this includes all the expenses that ate up AMD's profit, such as ramp up costs. Now, go back to Q4 with $4,780/wafer * 13 weeks * 3000 wafers/week, this gives gross 4Q profit of $186,420,000. Subtract the $90M fixed costs and net profit is $96,420,000. Also subtract an additional $10M for higher Dresden fab costs and $10M for higher advertising and we're left with a $76M profit or 0.36/share post tax. Petz