Advanced Micro Devices Inc (AMD)

[sgolds]

chipguy, putting a number on all those variables is really a swag. You could be right, but I don't think either of us have access to reliable numbers for this exercise. Still, here are my impressions:

- 131 mm2 vs 193 mm2

This is the one definitive number, A64 is 67% larger than desktop P4.

- bulk vs SOI

Here things change month by month. Based on the ramp rates we are seeing projected by the motherboard makers for Q1 and Q2, AMD must have substantial improvement in their SOI yields by now.

- 300 mm wafers vs 200 mm wafers

Ultimately, 300mm will be cheaper than 200mm. However, a few months ago I saw a comparison, and it turned out that 300mm wafers were still more expensive (per mm2) than 200mm. I suspect the process costs of 300mm are still high because it uses a lot of new equipment and there just hasn't been time to get it all tuned for high yields. I don't think we are currently seeing a cost difference between 200mm and 300mm; that could change next year.

- 6 vs 9 layers of interconnect

That will add time to the manufacture of A64, I agree.

- differences in packaging

OK, a little more costs for the extra pins. Is this significant?

- differences in test costs

What differences in test costs?

- manufacturing economies of scale

Yes, Intel always has this advantage when you don't fully burden the costs for corporate overhead. If you take the burdened number, I don't buy that Intel economies of scale overcome the extra corporate overhead.

So, I suspect your 3-4x number is a bit of an exaggeration overall. A64 does cost more to make than P4, to that I agree. As long as AMD keeps the ASP high then it is profitable. Remember, many of those P4 pieces are sold as Celerons in China.

It all works out OK.