Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 42.84

+7.0%

12:46 PM EST

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To: John F. Dowd who wrote (166825)	6/22/2002 10:21:43 AM
From: Dan3	Read Replies (1) of 186894

Re: what would it take in terms of capitalization to build a new INTC from scratch? Spend $2.8 Billion to buy AMD (its current market cap) and get AMD's FABs and flash and CPU tech and licenses. Spend another $12.5 Billion for 5 brand new, 300mm FABs to bring the total capacity of AMD and AMD's share of FASL up to what Intel has. Total - about $15 Billion. We should probably add in another $10 Billion for the development FABs, software teams, etc. Intel's current market cap: $128 Billion. So the replacement cost argument leads to a share price of about $3.50 (I am quite sure it will not go that low!) It's interesting to do the same exercise for AMD: Market cap of $2.8 Billion, with Dresden worth about $2 Billion, Austin worth about $1 Billion as a flash FAB, and half owernership of the FASL operation worth another $1.5 Billion. Add in another $1 Billion for AMD's development fab and other operations, and you get a replacement cost of $5.5 Billion - double the current market cap. Should Intel be selling for $3.50 and AMD for $17? No, but it's an interesting exercise.

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