Intel Corp (INTC)

[Nitt]

re:"but I thought that AMD was working with UMC to create a more specialized process just for the Athlon core. If that is true, then AMD may not suffer such a huge yield penalty."

The advantage that Intel has is they control ALL of the "dials" in the fab. This allows them to fine tune the process for best yield and best performance. In addition, the process people at Intel also can have a say on what changes might be needed in a design. AMD will never have control all of the dials in someone else's fab. Intel also has the ability to create a "copy exactly" methodology for any or all parts of the process in order to reduce excursions across its fabs... I'm not sure AMD will be able to dictate this especially if Intel keeps their foot on the gas and keeps moving the target that AMD and its fab partner will be trying to hit.

Of course AMD and UMC say they are working on a process for the Athlon core, but UMC also needs to deal with supporting a bunch of other customers. The only way AMD can keep UMC more focused on them then others it to pay more for wafers and buy more wafers. AMD’s financial health will play a role on how much focus they get from UMC.

I don’t remember anyone trying to make such a complex device in such high volume that needs to be sold at such a low price out of the gates in order to enable the future success of a company. AMD really has its hands full.

Nitt