> The initial versions of the CPU and GPU above were over 200 mm^2, which is quite large. Conjecture: making them initially a single chip would have resulted in substantially diminished yield.

A Pentium III (Coppermine) of that time had about 10M transistors and ~100 mm^2, so a die with more than 200 mm^2 was most definite at the upper end of what could be done. Chip fault rate goes not linear, but exponential with size, as a constant defect rate per wafer will now be distributed among less dies.

Example:

 - lets assume two dies of 250 mm^2 each or one die of 500 mm^2
 - If a wafer offers 25.000 mm^2, it gives 100/50 dies (*1)
 - If the process has an average of 10 defects, then 10 dies are dead (*1)
 - For the 250 mm^2 die this gives 90% yield
 - For the 500 mm^2 die this gives 80% yield

Easy to see that doing multiple chips will increase yield and decrease cost per chip.

> Was that the reason, or was there another factor?

It as well saves resources in development to do multiple chips, as that reduces not only complexity a lot but as well allowing independent schedules for both. This may sound contra intuitive at first, as they both have to finish before the machine can be build. But it allows each project to advance at their own pace for inbetween milestones while a common die would need to interlink every step and iteration. A classic problem of complex developments.

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*1 - Simplified by ignoring cut areas and alike

*2 - Simplified by assuming even distribution