Re: What are you going to argue now?
Costs:
All that new capacity is pushing Intel's costs up, while increasing competition from AMD is pushing revenue down. AMD's costs are up, too, but they have already made their big investments and AMD's revenues rose almost as fast as costs, even in brutal Q1 of 2001. In Q1 2001 (and the current quarter) Intel was able to make monopoly profits in the SMP and mobile segments. For next quarter that ends, as Intel's costs continue to rise.
Q1 2000 Q1 2001 Pct. Change
Intel
Revenue 7,993 6,677 -16.46
Expenses 5,439 6,035 10.96
AMD
Revenue 1,092 1,188 8.79
Expenses 911 1,022 12.18
Intel went from being 7.3 times the size of AMD in sales, to 5.6 times as large in one year.
Quite a trend, wouldn't you say?
And for all that new capex, Intel gains only a basic copper/.13 process, a shrink of what AMD has had for 1 1/2 years. AMD is putting in place a more advanced SOI/copper/.13 process.
Is SOI necessary to get the full benefit of .13 on copper? AMD sure seems convinced, and at this point, they have more experience with volume production on copper than anyone else on the planet. If SOI doesn't do much, they can fall back to plain wafers for .13 and still have roughly the same process as Intel's.
As far as the Quick ratio or TIE ratio is concerned, changes in the ratio will be a better predictor of future value than a static snapshot. Figure in the 10X capex rate, despite falling revenues, Intel is finding necessary and project it out a few quarters.
A positive note for both companies is that they are leaving the rest of the industry behind as they both continuously improve performance at an incredible rate. At some point there will be a slowdown in this price and performance war and by then there may well be no viable competition for the products of these two companies - and as the only two remaining producers they may both make a lot of money.
But meanwhile... |
