No 2.6GHz Phenom in Dec

[Zstream]

Originally posted by: Phynaz
Selling something below cost is NOT illegal. Goes on all the time.

Pick up the local Fry's add, see those $5 DVD's? They are below cost.

There was a time in the early 90's when Ford was selling Escorts for $3,000 less than it cost to make them. They needed the volume to make the CAFE mandates.

You don't seriously think AMD is making a profit on a $50 cpu? The most basic math shows that it's impossible. Really, my 12 year old could figure it out.

Sort of...if volume goes up, ASP stays static, and COGS go up at the same rate, then margins remain static.

Ummm....NO.

I would even provide you the quote from the AMD conference call stating that volume increases margins, but it's rather tiring having to constantly quote them for you. You can look it up yourself.

Just quit doing the disservice to other people of providing them wrong information.

BTW, I'm still waiting for that link about Henri Richard. You know, when you said he had attempted to leave AMD a year before he did leave? Need a link to your post?

Please explain as to why they are not making money? You have no proof so please stop spewing bs.

5$ dvd's are not below cost! Do you even know how much it cost to make a new dvd? The DVD is cheap, it is the IP that cost money.

 

[Phynaz]

It's called a loss leader.

Unless you think that a DVD costs the retailer less than $5.

 

[Viditor]

Originally posted by: Phynaz
Selling something below cost is NOT illegal. Goes on all the time.

Pick up the local Fry's add, see those $5 DVD's? They are below cost.

No they aren't...they are discounted by the manufacturer. Also, you're confusing retail sales with sales from a manufacturer, and they are treated differently.

There was a time in the early 90's when Ford was selling Escorts for $3,000 less than it cost to make them. They needed the volume to make the CAFE mandates.

And of course we know that Xbox's and Playstations are sold below cost.

You don't seriously think AMD is making a profit on a $50 cpu? The most basic math shows that it's impossible. Really, my 12 year old could figure it out.

You need to educate both you and your 12 year old better then...so, basic math? Let me help you with your education then...

1 x SOI 300mm wafer costs ~$5000.00
There are ~504 candidate Brisbane dice/wafer
This means they yield ~400 good chips/$5000 wafer, or $12.50 in wafer cost per chip (by far the most expensive part of each chip).
Then there's packaging, testing, and shipping...on a per chip basis, these are certainly less than the price of the wafer, but let's say that's another $12.50.
Total manufacturing cost of a Brisbane is close to $25...
Of course AMD actually sells that $50 chip for $30 to large customers, so the profit isn't huge...but it's still a profit.

Maybe you could enlighten us as to your 12 year old's math?

Sort of...if volume goes up, ASP stays static, and COGS go up at the same rate, then margins remain static.

Ummm....NO.

I would even provide you the quote from the AMD conference call stating that volume increases margins, but it's rather tiring having to constantly quote them for you. You can look it up yourself.

Looks like we need to work on both your math and reading for this one...
Let's try again:

GM = (R - COGS) / R
R = Revenue = ASP x Volume

If everything else remains static (which it never does), then an increase in volume becomes an increase in Revenue which means an increase in GM...

In effect, if you believe that as volume increases, GM increases, then you have just proven that they can't possibly be selling at a loss on anything.

1. If volume increases, then the COGS increases
2. If they are selling at a loss, then COGS increases at a greater rate than Revenue, making GM decrease...

 

[Viditor]

Originally posted by: Phynaz
It's called a loss leader.

Unless you think that a DVD costs the retailer less than $5.

Hmmm...firstly, that's retail and not manufacturing, which is different.
Secondly, Loss Leaders are illegal...

"Marketers should beware that some governmental agencies view loss leaders as a form of predatory pricing and thus consider it illegal"

 

[Phynaz]

Originally posted by: Viditor

Originally posted by: Phynaz
It's called a loss leader.

Unless you think that a DVD costs the retailer less than $5.

Hmmm...firstly, that's retail and not manufacturing, which is different.
Secondly, Loss Leaders are illegal...

"Marketers should beware that some governmental agencies view loss leaders as a form of predatory pricing and thus consider it illegal"

I notice you didn't respond to the fact that the video game console makers sell them below cost.

Two sentences later in the article you linked to:
"Of course, this differs from our discussion which considers loss leader pricing as a form of promotion and not a form of anti-competitor activity." Learning from Sharikou how to selectivly quote?


Here's the simple math for you:
$2B in revenue needed for AMD to break even in a quarter.
Divide this by the number of chips you think they will sell.

There's your ASP needed for break even. Anything below this number is sold at a loss. No need to to try to figure the cost of a chip.

BTW, you left out the SGA costs in calculation. Your profit at 80% yeild just went away. Oh, and you have been quoting $5K / wafer for as long as I can remember. Perhaps some Googling on the global silicon shortage will give you updated pricing.


I think we're done here. I'm going to call Sony and tell them they are breaking the law with every Playstation they sell.

 

[CTho9305]

I can assure you that this is incorrect...if for no other reason than it's illegal (Predatory Pricing).

I thought it's only illegal if you're in a market-dominating position. Even then, I wouldn't be sure it's illegal if you have a bin situation where nobody will buy your lowest bins at cost.

edit: Oops, didn't see that there was another page to the topic .

 

[Phynaz]

Originally posted by: CTho9305

I can assure you that this is incorrect...if for no other reason than it's illegal (Predatory Pricing).

I thought it's only illegal if you're in a market-dominating position. Even then, I wouldn't be sure it's illegal if you have a bin situation where nobody will buy your lowest bins at cost.

edit: Oops, didn't see that there was another page to the topic .

It would be illegal in that case. It's also illegal if the goal is to become market dominant, such as what ADM did with corn syrup.

 

[Viditor]

Originally posted by: Phynaz

Originally posted by: Viditor

Originally posted by: Phynaz
It's called a loss leader.

Unless you think that a DVD costs the retailer less than $5.

Hmmm...firstly, that's retail and not manufacturing, which is different.
Secondly, Loss Leaders are illegal...

"Marketers should beware that some governmental agencies view loss leaders as a form of predatory pricing and thus consider it illegal"

I notice you didn't respond to the fact that the video game console makers sell them below cost.

Because it's an entirely different market. The reason that they can get away with it is that
1. All of the manufacturers do so equally
2. Most importantly, the games for these consoles are proprietary, meaing that the profits for the games needs to be added to the selling price of the console to determine predatory pricing.

From the article you linked to:
"Of course, this differs from our discussion which considers loss leader pricing as a form of promotion and not a form of anti-competitor activity."

Exactly why I said that the rules for retailers is different than they are for manufacturers...

Here's the simple math for you:
$2B in revenue needed for AMD to break even in a quarter.
Divide this by the number of chips you think they will sell.

There's your ASP. No need to to try to figure the cost of a chip.

Wow...that's just so WRONG!

1. ASP is Average Selling Price...it has nothing to do with expenses.
2. $2B revenue needed for the company to break even has absolutely nothing to do with whether a part is sold below cost.
Here's an example...
1. Let's say that Intel loses the lawsuit and has to pay AMD $15 Billion for the settlement.
2. Obviously this hypothetical means that it will be much harder for Intel (the company) to maintain it's net profit.
3. However, this scenario wouldn't mean that it was instantly more expensive for Intel to manufacture their parts...

You are confusing Gross Profit (the amount of profit the company makes on their sales) with Net Profit (the amount of profit the company makes after all expenses and taxes are considered).

BTW, you left out the SGA costs in calculation. Your profit at 80% yeild just went away.

Because it's not supposed to be a part of Gross Profit...that's the whole point.

I think we're done here. I'm going to call Sony and tell them they are breaking the law with every Playstation they sell.

Fine...you do that.

 

[Viditor]

Originally posted by: CTho9305

I can assure you that this is incorrect...if for no other reason than it's illegal (Predatory Pricing).

I thought it's only illegal if you're in a market-dominating position. Even then, I wouldn't be sure it's illegal if you have a bin situation where nobody will buy your lowest bins at cost.

edit: Oops, didn't see that there was another page to the topic .

Sort of...but what most people forget is that Intel and AMD are not the only competitors.
While pricing below cost wouldn't effect Intel nearly as much, it could easily put companies like VIA out of business in the CPU sector.
Granted that they only have a .04% marketshare, but they would also have a very nice anti-trust suit if they could prove that AMD was pricing below cost.

Edit: anyway, the point is moot...it's obvious that AMD is not selling below cost (at least it is to anyone who can do the math...).

 

[Phynaz]

How did I know you would say "well that's different".

So, it would be illegal for AMD to sell a product below cost, but not Sony.

Yeah, okay...

Oh, and the math? Talk to your buddy Dirk, it's from the 3Q07 conference call. Or was he wrong again? Or maybe it wasn't him, you say so many other people are wrong I lose track.

I have to say you have confounded me with saying my calculation for ASP is wrong. I'm doing simple sales/units math, and you're off talking about hypothetical lawsuit settlements. Are you sure you're feeling okay? Your posts seem to be getting a little manic.

 

[Viditor]

Originally posted by: Phynaz
How did I know you would say "well that's different".

I don't know...maybe because you knew that it was a silly comparison in the first place?

Oh, and the math? Talk to your buddy Dirk, it's from the 3Q07 conference call. Or was he wrong again? Or maybe it wasn't him, you say so many other people are wrong I lose track.

I'm not saying Dirk was wrong, I'm saying your understanding of what he said is wrong...
If you actually post the quote, myabe I can help you with it...

 

[Cookie Monster]

PHENOM X4 9500 QUAD CORE already on sale!?!?

This is one of my local NZ stores i go pick up my hardware.

Has phenoms been launched already??

Slightly confused here.

 

[DrMrLordX]

Several etailers have them on pre-order . . . not sure if someone is selling them early.

 

[dmens]

Originally posted by: Viditor
Not at all! Both Intel and AMD have been following this practise at the beginning of every ramp for the last 7 years...the only reason it's a tri-core is because these are also the first native quad-core chips ever. AMD has already stated that Tri-Cores will have a very short lifespan for sales.

are you talking about disabling cache? because disabling a core is a little different, especially when the main marketing pitch for K10 is the supposed "native quad core", and i see you're a fan of that marketing soundbite. what's the triple core? a crippled true native? image is a big deal in the business and they wouldn't risk that kind of marketing embarrassment unless the money is needed.

do you always accept everything the AMD marketers say? kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

Think of it this way...let's say that they begin their ramp at a very high yield (say 70%).
That's ~217 candidate dice/wafer, so ~152 good dice. If they can salvage even 40% of the defective dice, that's 26 Tri-cores/wafer, or 780,000 Tri-cores/month...and that's on an amazingly high yield! The lower the yield of course, the more Tri-core candidates they have.

lol, nice spin. the lower the quad yield, the better the tri-core production. it's a win-win situation.

so, if lower yields on the quads make the triple cores financially appealing, why do you keep denying that this move is indicative of quad yield issues?

 

[Viditor]

Originally posted by: dmens

Originally posted by: Viditor
Not at all! Both Intel and AMD have been following this practise at the beginning of every ramp for the last 7 years...the only reason it's a tri-core is because these are also the first native quad-core chips ever. AMD has already stated that Tri-Cores will have a very short lifespan for sales.

are you talking about disabling cache? because disabling a core is a little different, especially when the main marketing pitch for K10 is the supposed "native quad core", and i see you're a fan of that marketing soundbite. what's the triple core? a crippled true native? image is a big deal in the business and they wouldn't risk that kind of marketing embarrassment unless the money is needed.

do you always accept everything the AMD marketers say? kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

Think of it this way...let's say that they begin their ramp at a very high yield (say 70%).
That's ~217 candidate dice/wafer, so ~152 good dice. If they can salvage even 40% of the defective dice, that's 26 Tri-cores/wafer, or 780,000 Tri-cores/month...and that's on an amazingly high yield! The lower the yield of course, the more Tri-core candidates they have.

lol, nice spin. the lower the quad yield, the better the tri-core production. it's a win-win situation.

so, if lower yields on the quads make the triple cores financially appealing, why do you keep denying that this move is indicative of quad yield issues?

Yes, yes mate...it's ALL a marketing conspiracy. :roll:

Are you then saying that Intel didn't mind the "marketing embarrassment" because the "money was needed" when they made Core Solos from Core Duos with a damaged core?

As I said, both AMD and Intel have done exactly the same thing for many years...

 

[21stHermit]

Originally posted by: Viditor
Are you then saying that Intel didn't mind the "marketing embarrassment" because the "money was needed" when they made Core Solos from Core Duos with a damaged core?

Viditor,

What does a single die cost on average? I'd be surprised if more than a few $$, then their's packaging and testing, probably more than a bare die.

I'm not talking the loaded cost considering the $2-4B Fab, but rather the cost of labor and materials. Clearly, Intel could have run more wafers through the fab and tossed the Solos, but for reasons of fab capacity and/or profit chose to make "Solos".

Arguing against the triple core is software. I was talking recently to the code writer of my most important application, a text to binary compiler. He optimized it for a dual core Intel, impling that a quad is more effort and certainly a triple yet more. I nievely thought that once multi-threaded it was good for all cases. Appears not.

Thanks
Hermit

 

[dmens]

Originally posted by: Viditor
Yes, yes mate...it's ALL a marketing conspiracy. :roll:

Are you then saying that Intel didn't mind the "marketing embarrassment" because the "money was needed" when they made Core Solos from Core Duos with a damaged core?

As I said, both AMD and Intel have done exactly the same thing for many years...

there is no marketing embarrassment for core solo because intel didn't make the issue a marketing point, whereas the biggest marketing point of K10 is the so-called "native quad core". it's a bit hard to trumpet that fact when there's a bunch of triples on the market. is that worth the money?

any other bullshit explanations regarding yield?

 

[Viditor]

Originally posted by: 21stHermit

Originally posted by: Viditor
Are you then saying that Intel didn't mind the "marketing embarrassment" because the "money was needed" when they made Core Solos from Core Duos with a damaged core?

Viditor,

What does a single die cost on average? I'd be surprised if more than a few $$, then their's packaging and testing, probably more than a bare die.

I'm not talking the loaded cost considering the $2-4B Fab, but rather the cost of labor and materials. Clearly, Intel could have run more wafers through the fab and tossed the Solos, but for reasons of fab capacity and/or profit chose to make "Solos".

Arguing against the triple core is software. I was talking recently to the code writer of my most important application, a text to binary compiler. He optimized it for a dual core Intel, impling that a quad is more effort and certainly a triple yet more. I nievely thought that once multi-threaded it was good for all cases. Appears not.

Thanks
Hermit

Your preaching to the choir on that one Hermit...95% of the applications I use would be just as happy on a dual core and even a single core.
That said, there are a few apps (mostly my video apps) that love multi-cores, the more the better. Your friend is correct in many applications, but not all...

But to answer your question about cost, it depends on a number of things...but the 2 biggest are die size and yield.
Each wafer that AMD uses to produce chips is a 300mm SOI wafer, and they cost ~$5000 each.
If the chip is 283 mm2, then you get 217 candidate dice (in other words you can fit 217 chips on a wafer).
Then comes the unknown bit...yields at the beginning of a ramp are always lower than they are later (later being a mature yield). In general, ramp starts with a yield in the 50-60% range are considered quite good, and 70% is excellent. Mature yields get into the 80-90% range...

So, assuming that the quad cores are only at say 60% and they throw the defective dice away, that means that each die costs ~$38.50...
However, if you can salvage even half of those dice by shutting off just 1 core or a single L2 cache (like Intel and AMD do at the start of almost all of their ramps), then your yield jumps to 80% and each die costs ~$28.90!
If you consider that Fab 36 is rated at 30,000 wafers/month, that's a savings of ~$288,000/month on your costs and over 1 Million extra chips for your inventory (which for AMD who only has one large Fab operating right now is also important).

 

[Viditor]

Originally posted by: dmens

Originally posted by: Viditor
Yes, yes mate...it's ALL a marketing conspiracy. :roll:

Are you then saying that Intel didn't mind the "marketing embarrassment" because the "money was needed" when they made Core Solos from Core Duos with a damaged core?

As I said, both AMD and Intel have done exactly the same thing for many years...

there is no marketing embarrassment for core solo because intel didn't make the issue a marketing point, whereas the biggest marketing point of K10 is the so-called "native quad core". it's a bit hard to trumpet that fact when there's a bunch of triples on the market. is that worth the money?

any other bullshit explanations regarding yield?

Of course it's worth the money...AMD has the only native quad cores as well as the only native tri-cores.
I honestly have no idea what your point is then dmens...my impression is that you think their yields are terrible because releasing a tri-core is somehow "embarrassing".
I honestly don't get that...

 

[Phynaz]

Hermit, I'm going to be frank here.

Viditor is talking out of his ass. He is flat out wrong. He knows nothing about yield. He doesn't even know the different ways yield is calculated and measured.

The day any manufacturer can get 80-90% yield on a chip the size of Barcelona, I'll buy both you and him one.

Hell, I'll buy you both an entire wafer full.

 

[CTho9305]

Originally posted by: dmens
kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

It's not a lie just because it came through official channels.

 

[dmens]

Originally posted by: CTho9305

Originally posted by: dmens
kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

It's not a lie just because it came through official channels.

when's the last time you heard some straight talk from either company's PR hacks?

 

[Viditor]

Originally posted by: dmens

Originally posted by: CTho9305

Originally posted by: dmens
kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

It's not a lie just because it came through official channels.

when's the last time you heard some straight talk from either company's PR hacks?

What makes you think that it was a PR hack that Anand talked to?

 

[dmens]

Originally posted by: Viditor

Originally posted by: dmens

Originally posted by: CTho9305

Originally posted by: dmens
kinda like that thing with the K8 L2 latency getting higher for "scalability"... on a EOL product nonetheless.

It's not a lie just because it came through official channels.

when's the last time you heard some straight talk from either company's PR hacks?

What makes you think that it was a PR hack that Anand talked to?

nothing gets out without PR approval, regardless of source.

 

[Pederv]

Originally posted by: GFORCE100
The very fact AMD stated it would sell tri-cores was as strong indication as any that AMD is having yield problems.

Or maybe, in order to get frequency up and keep heat down.