Amd Officially Benches Bulldozer

[Stewie007]

You know that a top crop cpu basically costs the same to make as the lowest end cpu, right? (yeah yeah i know thats not entirely true anymore with the drifferent masks for n-core cpus)

The higher the avg price they can sell there cpus, the higher the profit.

No he doesn't know that, because it isn't true. According to AMD's most recent Quarterly Filing, the APUs represent a lower cost product. Its in the footnotes. Manufacturing processes are never black and white. Not only do the APUs represent a lower cost product, but higher volume of sales.

Excerpt from SEC Filing:

Computing Solutions operating income was $142 million in the second quarter of 2011 compared to $128 million in the second quarter of 2010. The
improvement in operating results was primarily due to a $16 million decrease in cost of sales and a $10 million decrease in research and development
expenses partially offset by a $9 million increase in marketing, general and administrative expenses. Cost of sales decreased primarily due to increased
volume of lower cost APU platforms. Research and development expenses decreased and marketing, general and administrative expenses increased for the reasons set forth under "Expenses" below.

Computing Solutions operating income was $142 million in the second quarter of 2011 compared to $100 million in the first quarter of 2011. The
improvement in operating results was primarily due to a $17 million decrease in research and development expenses and a $14 million decrease in marketing, general and administrative expenses. Research and development expenses and marketing, general and administrative expenses decreased for the reasons described under "Expenses" below.

Computing Solutions operating income was $242 million in the first six months of 2011 compared to $274 million in the first six months of 2010. The
decline in operating results was primarily due to a $46 million increase in marketing, general and administrative expenses and a $36 million increase in
research and development expenses, partially offset by a $13 million decrease in cost of sales. Marketing, general and administrative expenses and research and development expenses increased for the reasons set forth under "Expenses," below. Cost of sales decreased primarily due to increased volume of lower cost APU platforms.

Additionally, lets say that you are correct and both products cost the exact same in variable costs. You sell 10,000 of your low end, and 1000 of your high end. The low end product sells for 100, and the high volume for 250. Your revenues are 1,000,000 and 250,000 respectively. So, we're back to square one. Even if you were correct and cost is the same for both (which it is not), you still are not making that much on your high end chips.

In general, the less expensive the product, the higher the volume of sales. In order for the high volume products in my example to bring in the same revenues, they would have to sell for ten times as much given a 90/10 mix. Or For the same price it would have to be 60/40 for mainstream/high end respectively.