Time Traveler, U R mistaken about gross margin calculation. My statement was
If CPU's are 3/4 of Intel's revenue, then the theoretical highest
gross margin for CPU's is 65%. (0% gross margin on 1/4 of sales, 65% gm on 3/4 of sales)
This is based on fact that Intel overall gross margin was 0.49.
Your math: 60% / 75% != 65%! In fact 60% / 75% = 80%
I never claimed that 60% / 75% is 65%. Where did this come from?
Intel gross margin is 49%. That means that for every $100 in sales, there is $51 of expense.
Now assume that, for the $25 of sales in the non-CPU business, the gross margin is ZERO, that means the costs in the non-CPU business are $25. Since total costs are $51, there must be $26 of cost in the CPU business.
By the definition of gross margin = 1 - cost/sales, for the CPU business, CPU_gross_margin = 1 - 26/75 = 0.653333
I will copy the conclusion of my original post:
It would be a stretch to estimate gross margin on CPU's as
high as 60%. What this means is that Intel does not build CPU's for $50, but for at least 0.4*ASP = 0.4*$233 = $93
$50 is a totally impossible estimate.
$50 is probably about the cost if we exclude depreciation.
My estimates were based on the following assumptions:
19M CPU's in 2nd quarter (if higher, cost per CPU would be lower)
25% of revenue from non-CPU lines (if higher, cost per CPU would be higher)
Gross margin in non-CPU business around 16% (if higher, cost per CPU would be higher)
Petz |
