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

To: Scumbria who wrote (56374)	4/26/1999 1:55:00 AM
From: Tenchusatsu	Read Replies (1) \| Respond to of 1571598

<Isn't profit the difference between revenues and costs? You didn't include any consideration of costs in your analysis. By all accounts, yields are up.> That doesn't mean costs are down at all. Yield is just the amount of output you get from a given amount of input, i.e. costs. AMD may be cutting costs in other areas, like the Vantis sale or the 300 employees who will soon be getting the axe. But as AMD gears up for the K7, and as it desperately tries to ramp up the K6-III, I believe that costs in its MPU operations may even go up this quarter. That means that overall, Q2 costs should be holding steady. Tenchusatsu

To: Scumbria who wrote (56374)	4/26/1999 3:06:00 PM
From: DRBES	Respond to of 1571598

re: "Isn't profit the difference between revenues and costs? You didn't include any consideration of costs in your analysis. By all accounts, yields are up." Actually, Jerry gave a very interesting and possibly useful (FOM: Figure Of Merit or Tool of Analysis) He stated that currently AMD must realize $10,000.00/wafer for break even. Any way that they go above this number results in profits (Whatever the heck that is; it sounds like something new and possibly good). When they dip below this number they have losses. (We know what those are.) At the risk of pointing out the obvious: Higher yields and/or higher asp's are good and lower yields or lower asp's are bad. However it is whatever they multiply out to that is ultimately relevant. Wafer starts are a far more complex contributor but they also figure in. Regards, DARBES