Dear Pete, <<<Now simply take a look at Intel. The marginal cost to process a 0.18u 200mm wafer has been estimated by many here including people in the processing section to be about $2K. Taking the normal estimates of yield, packaging costs, etc. leads to a marginal cost of between $25 and $50 a P3 CPU. The cost to an Intel OEM averages to some where between $100 and $200 for that CPU. Thus the markup for MG&A, R&D, engineering, FABs and profit becomes around 4x the marginal cost. That is typical. The number comes up again and again.>>>
Before we start taking your model too seriously, first let us examine how you would account for (according to your friend and supporter) Dan's assertion that Intel sells 6M Xeon chips with an ASP of $1200?
If we were to use your 2% or .2% server model, each of these 6M Xeon chips would go into a server that would sell for between $60,000 to $600,000.
Using your type of logic, if you took an average between $60,000 and $600,000 that would give you a Xeon server market of $1,980,000,000,000 (6M X $330,000).
Now, even if were we to use the more reasonable model of 2%, the Xeon server market alone comes out to $350,000,000,000.
However, if we were to use my 25% model, the Xeon only server market comes out to a more reasonable $28.8B.
Mary |
