Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 48.32

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3:59 PM EST

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To: Dan3 who wrote (153867)	1/5/2002 2:07:46 PM
From: Craig M. Newmark	Read Replies (1) of 186894

Re: "They invest in their FABs at a rate that loads them with $7,500 million in new CAPEX costs each year and produce parts at a rate of 100 million per year (a nice round number) - that's a $75 per chip capex cost . . ." It sure is. This is a devastating display of arithmetic. One small question, though: what is the economic lifetime of those capex expenditures? Might they be, oh I don't know, six years, say? Then you get a capex/chip of roughly $12.50 (not allowing for time value of money and a possible reduction in chips/$ over the economic lifetime). Then with the 50% reduction you come up with later in your post, we're down to around $6. Suddenly, Intel's costs don't look so enormous. Craig

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