Intel Corp (INTC)

[Elmer Phud]

Dew -

Are you disagreeing with Alan that this rule of thumb has any value for semiconductor-industry investors and analysts?

No I'm not disagreeing with him, just pointing out that what a process is capable of producing and what the market is willing to buy may not line up.

Assuming other variables are kept constant, by what magnitude would you expect the frequency distribution to widen at a foundry relative to a dedicated house? 50%? In other words, if Alan’s “+/-10%” is a reasonable rule of thumb for dedicated houses, would “+/-15%” be a comparable rule of thumb for foundries? T.i.a. Dew

I've never analysed the frequency distribution of a foundry because all the foundry based products I've dealt with had only one speed, but I would "expect" the numbers you quote to be reasonable. My point is that in a market where frequency is so dominant it is a mistake to assume that the market sweetspot corresponds to the process sweetspot for the entire industry. Is the entire industry making money or only one player? Is it possible that one player may have a process advantage? Once again getting back to AMD because it makes such a good example, they are having real problems delivering meaningful quantities at higher speeds where APSs are better. Their output is very poor for a fab their size, their ASPs stink and they're losing a ton of money yet their marketing says they have 2800+ product. Do they really? When the market leader has a distance on the rest of the field you will find everybody elses marketing teams making claims they can't deliver to and you should take that into consideration when judging where their fab's speed distribution lies. TMTA may be selling 1GHz product because the market demands it but that doesn't mean the binsplits are good enough to allow any profits at that speed. How many wafers do they have to go through to get enough of those 1GHz parts? Is market share more important now than profit?

EP