Post by edification on Oct 24, 2003 11:10:12 GMT -8
yahoo.businessweek.com/technology/content/oct2003/tc20031023_9828_tc055.htm
SNIPPETS:
Yet analysts say AMD's chip production costs are higher than those of Intel, thanks to its less favorable economies of scale. Adding to that problem, AMD is way behind its rival in adopting the latest manufacturing processes.
The penalty it pays for using older chipmaking techniques is striking. AMD plans to move from 200 millimeter-diameter wafers -- silicon plates from which chips are stamped -- to 300-mm plates in mid- to late 2005, a transition that Intel is making right now. Such a shift allows for more chips to be made from every wafer, at cost savings of up to 30%. Similarly, AMD trails Intel in moving to making smaller chips, and the smaller the chip, the more that can be stamped out of every wafer.
Also in the fourth quarter, Intel will start shipping its latest Pentium for normal PC use, called Prescott. Next year, analysts expect Intel to crank up Prescott to a clock speed of 4 gigahertz (vs. 3.2 Ghz for the fastest chip today).
Already, many analysts view AMD as a memory maker more than a processor maker. Sales of flash, a type of memory used in cell phones, now account for half of AMD's sales, up from 37% in the third quarter of 2002. Flash doesn't make money for AMD yet, in part because its price fluctuates wildly, but it could be profitable by next year's first quarter, analysts estimate. Because AMD is the largest maker of one of two primary types of flash memory, it will benefit from a rise in the overall flash market, which analysts think will grow 47%, to $11.3 billion, this year. That's why J.P. Morgan and UBS Warburg have both upgraded AMD's stock from underperform to neutral.
SNIPPETS:
Yet analysts say AMD's chip production costs are higher than those of Intel, thanks to its less favorable economies of scale. Adding to that problem, AMD is way behind its rival in adopting the latest manufacturing processes.
The penalty it pays for using older chipmaking techniques is striking. AMD plans to move from 200 millimeter-diameter wafers -- silicon plates from which chips are stamped -- to 300-mm plates in mid- to late 2005, a transition that Intel is making right now. Such a shift allows for more chips to be made from every wafer, at cost savings of up to 30%. Similarly, AMD trails Intel in moving to making smaller chips, and the smaller the chip, the more that can be stamped out of every wafer.
Also in the fourth quarter, Intel will start shipping its latest Pentium for normal PC use, called Prescott. Next year, analysts expect Intel to crank up Prescott to a clock speed of 4 gigahertz (vs. 3.2 Ghz for the fastest chip today).
Already, many analysts view AMD as a memory maker more than a processor maker. Sales of flash, a type of memory used in cell phones, now account for half of AMD's sales, up from 37% in the third quarter of 2002. Flash doesn't make money for AMD yet, in part because its price fluctuates wildly, but it could be profitable by next year's first quarter, analysts estimate. Because AMD is the largest maker of one of two primary types of flash memory, it will benefit from a rise in the overall flash market, which analysts think will grow 47%, to $11.3 billion, this year. That's why J.P. Morgan and UBS Warburg have both upgraded AMD's stock from underperform to neutral.