One of the most important parameters of any processor is their cost, this is what the manufacturers think. True, as the production costs determine the company revenues and as a result its pricing policies. Therefore, AMD and Intel lay themselves out trying to prove the fans that their chips are more profitable to produce.

As we read over here, Intel Claims that Pentium 4 production will be much cheaper when they start using 300mm wafers and reduce the die size to 131sq.mm. So, some company officials claim they will be able to get a 50% production costs benefit compared to their competitors. Really, the simple calculations show that Intel will be able to get 497 Northwood dies out of one 300mm wafer. AMD in its turn, cannot use larger 300mm wafers in their Fab30 in Dresden where 0.13micron Athlon XP processors on Thoroughbred core are produced. Therefore, they have to be happy only with 200mm wafers.

However, despite this logics Intel’s arguments can be refuted easily. AMD also has a few trumps, which help the company to oppose Intel successfully. The major advantage AMD can boast is the smaller die size of the processor cores developed by the company. In particular, the die size of a 0.13micron Thoroughbred core, which should be used in the new Athlon XP processors is equal to 84sq.mm, which is 36% smaller than the Pentium 4 Northwood die size. As a result, 326 dies will fit onto a single 200mm wafer, which is not much smaller than by Intel. However, you should also remember that 200mm wafers are cheaper than 300mm wafers, as a result, the production costs of Thoroughbred and Northwood cores appear equal and make around $20. As for the chips yields, the leading analysts suppose that both companies have almost the same rates here. So, it is not the right time now to name a leader.

All other AMD cores will also be smaller than corresponding solutions from Intel. For example, 0.09micron Prescott core for Pentium 4 processors will be 90sq.mm big, while ClawHammer-S and Thunderbird-S manufactured with similar technology will be 63sq.mm and 50sq.mm respectively.

In the future, we can suppose that the shift to 300mm wafers by AMD will cause a reduction of the processor production costs, which will let the company outpace Intel in terms of CPU production costs. In the end of the year, UMC will also start making Athlon XP processors, and this company has all the necessary equipment for 300mm wafers use. Moreover, a joint UMC and AMD fab, which should start working in 2005 also will be equipped to work with 300mm wafers.

Summing up, I would like to say that although the current situation is similar by Intel and AMD, the future seems to be more successful on AMD’s part.