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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 207.67+2.2%Jan 12 3:59 PM EST
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To: Elmer Phud who wrote (148763)1/23/2005 7:35:15 AM
From: RinkRead Replies (1) of 275872
 
Elmer, It's far from impossible to tell us where this math goes wrong in your opinion:

Intel's depreciation last quarter was $1,140M. They sell an average of 43M CPUs a quarter.

At least 70% of Intel's depreciation is attributable to CPUs. That is a very conservative estimate, because many of those loss-leader comm products you like to brag about use old equipment in old fabs=very little depreciation. Or things like "reference designs" with no depreciation at all.

Do the math, that's $19 per CPU that Intel makes. Which makes depreciation per Smithfield 2.75x as big as that ($51), based on your own yield estimates and assuming Prescott is an "average" Intel CPU.

See I think you have no explanation for average depreciation / cpu lower than $19. Your information shows depreciation / cpu is like a quarter of this but you ignore the depreciation of all fabs that are not fully utilized to produce cpu's. That is relevant because cpu division is (I'm only slightly generalizing) the only division that makes a profit, and hence has to carry the depreciation of those underutilized fabs for the portion they are underutilized. Tell me where I'm wrong if at all.

Regards,

Rink
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