Advanced Micro Devices Inc (AMD)

[bobs10]

The cost of the wafers are a bit of a red herring.

Me....

It doesn't make any sense to look at just one factor in a process as complicated as processor production. Things like higher bin splits/yields could easily offset the added cost of SOI. I'm no process expert, but clearly something is working, as AMD seems very willing to take the fight to INTC even without fab36 production.

A few possible reasons for this bellicose posture could be:

1) Better yields/binsplits from 90nm.
2) Inventory carryover from q3, despite a banner q3.
3) The need to prime the market for fab36 production next q.
4) 90nm fab36 sample production that's good enough to sell now.
5) New stuff that requires the clearing out the old.
6) AMD is selling everything it has and is doing a remarkable job of managing sales/demand.

I would guess that probably more than one of the above apply but who knows? Also, there is probably a lot more factors than I listed.

The really strange thing about the battle that seems to be shaping up is that it's occurring just as INTC is bringing on 65nm. Clearly AMD isn't being intimidated. You would think that an AMD having to compete with both 65nm and 300mm would be in a defensive mode, but that's not what we're seeing.