Claims that the current TSMC 40nm process that is being used for the AMD/ATI Cypress family is achieving yields of in the neighborhood of 40% don’t seem to have a shred of truth. Our sources close to TSMC claim that actually the 40nm process that is being used for the Cypress family is routinely achieving yields in the 60% to 80% range, which is actually confirmed by the fact that ATI is keeping product in the pipeline and you can actually buy boards at retail.

Chip yields seem to be the topic of discussion lately as the much larger Nvidia Fermi chip is struggling with yield issues as our sources suggest that the actual yields are as low as 20% and are not improving quickly according to sources close to the fabs. With wafer starts costing about $5K the numbers suggest that each chip would cost an astounding estimated $200 per chip which pegs the card with a sticker price of about $600.

Those in the know are claiming that Fermi despite the yield and thermal issues is only about 20% faster than Cypress, while Hemlock smokes it. The combination of low yields,  high thermals, and marginally better performance than Cypress could be conspiring to place Nvida in the position of having to release the card, but have to sell it at a loss till they are able to address the issues in the next spin according to sources. Because of the situation a mole we know is suggesting that Nvidia may limit the sales of Fermi to consumers and instead use the chips for the Tesla and Quadro products where prices and margins are much better.

All of the talk of yields seems to be in some ways nothing more than a smoke screen to shine the light off of the current situation to stall sales by promising something that most consumers are likely going to be unable to buy. The moles claim you will not need a pair of 3D glasses to watch this shake out in the next few weeks.