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

To: Gary Ng who wrote (58560)	5/18/1999 1:32:00 AM
From: Scumbria	Read Replies (2) \| Respond to of 1571724

Gary, Thanks. That is one area I am always puzzled. Assuming that Intel engineer is say 10% less smart than AMD's and that the cost for developing K6 would be 500M and P6 would be 550M. Intel design teams are about 3-5x the size of AMD and Cyrix design teams. Scumbria

To: Gary Ng who wrote (58560)	5/18/1999 10:03:00 AM
From: Steve Porter	Respond to of 1571724

Gary, Actually the way it works from a pure accounting point of view (I believe) is that the design cost for a chip is very rarely paid for by the chip itself. The R&D money comes from the previous generation. For example, all the R&D on Intel's books during the late 486 and Pentium days was related (mostly) to the development of the P6 core. The same with the K6. The cost of the K6 is factored (from a pure profit and loss standpoint) into the K5. THe K6-2 costs were presumably paid for by the K6, and so on. That's why you see R&D on the quarterly statements. When the r&d is finished on a chip, only then can you start selling it. So technically the cost of Merced is being carried mostly by the P6 core. Regards, Steve