Vince, you may remember the discussion on processes in the XBoxII thread - and your point that ATI's decision to stick with what was known was a "one off" that it paid off, but is that really the case?
http://yahoo.businessweek.com/technology/content/sep2003/tc2003094_3081_tc024.htm
http://yahoo.businessweek.com/technology/content/sep2003/tc2003094_3081_tc024.htm
BEHIND THE CURVE. The same scenario has played itself out across the industry over the past year, with many players finding that it pays to stick with the tried and true. That's a 180-degree turn in thinking for high-end chipmakers. For years, outfits that didn't migrate -- and fast -- to the newest and greatest in chip-production technology were regarded as laggards. The accepted wisdom was that new manufacturing processes always offered higher yields and lower costs.
That remains the prevailing view on Wall Street. "It's very clear that investors, at this point, prefer companies that are investing in new technologies," says Merrill Lynch analyst Brett Hodess. "Otherwise, they think they won't be able to produce the right products." But profitability, growth, and high returns no longer seem to go hand in hand with high-risk investments in new manufacturing processes, if the the past year is any indication.
Inside the industry, fast technological migration is no longer viewed as closely tied to a success, says Ray Bingham, president and CEO of chip design software powerhouse Cadence (CDN ). For a lot of chipmakers -- especially those whose chips go into products with a lifespan of more than two years -- waiting until new manufacturing technologies prove viable is starting to look like a smart strategic and financial move. New processes no longer guarantee good yields and often require costly chip redesigns.