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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 214.53-0.3%11:56 AM EST
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To: pgerassi who wrote (156949)4/19/2005 5:22:22 PM
From: NITTRead Replies (2) of 275872
 
Pete,
I'm not sure if Intel is "making money" or if they are "profitable".

Here's my stab at some definitions:

Profitable-

By accounting rules you would take into account all the material and people costs and R&D and Capital depreciation, you could come up with a P&L for flash. My guess is the product line is unprofitable by that set of rules.

Making Money-

Here’s an example: If you were going to ship 10M units at and ASP of $5, but you could ship 30M at $4. And your material cost was $3 per unit in both cased and you had a fixed set of costs for people, depreciation, R&D, etc, etc, of $50M. You could argue the additional volume made $10M in money, but the business still lost $20M versus the $30M at lower volume and higher price.

I have no clue what Intel did in flash profit or loss, but you hope that the move this past quarter at least reduced the loss even if it didn't make a profit under accounting rules.

Nitt
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