Who makes chips cheaper?

The CPU wars between Intel and AMD are taking an intriguing new turn, as AMD's super-teeny Thoroughbred chips are set to square off against Intel's much, much larger Pentium 4 chips. AMD would seem to have the cost advantage, except Intel has moved to new 300mm wafers. Not only that, but Intel has apparently found a way to shrink its 130nm manufacturing process even further, taking Northwood chips from 145 square millimeters to 131 square millimeters. (T-bred, by contrast, is only 84 square millimeters.) So AMD has small chips, and Intel has big wafers.

I've been predicting an all-out CPU price war for a while now, since AMD can't beat Intel on outright performance any longer. It could get brutal.

So the key question is: who makes processors cheaper? That's the subject of this story at CNET by Michael Kanellos. Claims by both AMD and Intel sound great, but they're hard to evaluate. This article takes a stab at sorting through them:

The exact yields are also shrouded in mystery, but both Intel's Bryant and AMD's Sanders are arguably right on this issue. Because its wafers are larger, Intel can probably yield 50 percent more chips per wafer as Bryant said. But in terms of percentage, the companies are likely close, as Sanders said.
Tricky, no?
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