Dan,
Too bad it costs them $75 per chip to build and outfit the FAB.
No one expenses the costs of a fab and its equipment. Instead those costs are CAPITALIZED and depreciated over its useful life. Additionally, the DEPRECIATION expense is factored into the Cost of Goods Sold.
Therefore, a per chip cost would include depreciation. Additionally, the more chips Intel sells, one should reasonably expect a decline in per chip costs, hence higher gross margins, all other things being equal, i.e. chip ASPs.
Now, as to General and Administrative expenses and Sales and Marketing expenses, G&A would be fairly fixed and INDEPENDENT of the number of chips sold. Therefore, if Intel Sells more chips, one should expect that G&A per CHIP to decrease.
Now, as to Sales and Marketing expenses, a portion of that cost is fixed and I would venture to say that another portion is tied to the number of chips sold. Therefore, if a company sells more chips, I would expect Sales and Marketing to increase, likewise.
If you truly hate Intel and wish to short it, I have a "few" shares that I'd let you borrow to sell... <g> |
