Advanced Micro Devices Inc (AMD)

[wbmw]

Re: Industry sources express concern about limited capacity for AMD in 2006

The big problem here is the shift to dual core for AMD. With the majority of sales being small die Semprons, moving volume from a die that's 84mm2 (Sempron) to one that's 220mm2 (F-step DC) is going to eat up major capacity. Every dual core they sell comes at the expense of 4 Semprons*. Even going to 300mm wafers, it is still nearly a 2:1 loss**.

Right now, their X2 volumes are probably 5% or less of sales. Your ASP model for AMD expects the Sempron mix in the range of 85% of AMD's sales, which would mean that X2 volumes are most certainly less than 5%. If Intel is moving 60-70% of their desktop line to dual core by the end of the year, AMD will have to start shifting more resources to stay competitive.

If they are making 300,000 dual core parts now and shift that to 1,500,000 for example, it would come at the expense of 4.8M Semprons. That's about 40% of AMD's current capacity. It's no wonder that they will be constrained this year, even with Fab36 coming online.

* Assuming 200mm wafers and 0.25 defects/cm2, they can get 254 good Sempron die per wafer, but only 64 F-step dual cores.

** On 300mm wafers, a 220mm2 die yields 156 good die.

http://www.icknowledge.com/misc_technology/die_calculator.xls