Re: Still think Intel will have lower EPS than AMD?
As I've posted before, I think the next two quarters will be considerably tougher on Intel than the last one was. Intel basically had the notebook market to itself for nearly the entire quarter and could charge pretty much whatever it wanted to, while for Q3 and Q4, AMD will have significant mobile market share, letting AMD make some money there and forcing Intel to cut prices since it no longer has a monopoly. Intel will also go from mostly selling chips that cost it $20 to make to mostly selling chips that cost it $50 to make.
As far as last quarter is concerned, we don't yet have numbers from Intel that reflect the last 3 weeks of the quarter - AMD sold record units in a slow quarter so Intel units were likely down a little. Certainly the prices for Intel chips on pricewatch fell throughout the quarter.
In the last reported quarter, AMD expensed as depreciation all but $8 million of its quarterly capital costs, while Intel expensed all but $1,587 million of its spending on plant and equipment.
At this rate, AMD can go on forever, adding a new $3 Billion FAB every 5 years, while reporting zero profits.
At this rate, Intel is bleeding down reserves at $6.35 Billion per year if it reports breakeven quarters.
It will be downright fascinating to see how these two companies are doing 2 quarters from now.
Dan |
