Yousef, "The $2000/wafer costs that you quote already include depreciation"
You are absolutely and totally incorrect. The wafer itself (8") costs about $500. The human resources needed to process it through the many steps of production is at least $1,000 per wafer. Chemicals, electricity for equipment, etc. costs a few hundred $. These are referred to as direct costs or variable costs and are the only things included in the $21.25 number.
To prove it, lets estimate how many wafers Intel used in Q4. The average die size was 140 mm^2 (quite a bit larger for Celeron, a little smaller for Pentium II). There's 30,000 mm^2 in an 8" wafer, and with 10% wasted space, the theoretical number of die per wafer is 193. With Intel's sky-high yields, they should have averaged 150 good chips per wafer. Oh, heck, I'll give the benefit of the doubt and say they only could get 120 good chips per wafer.
Q4, Intel made 26M CPU's. Therefore, they needed 217,000 wafers. Now, Yousef says the $2000/wafer costs that you quote already include depreciation.
This means 217,000 times $2,000 must be greater than Intel's depreciation expense in Q4, for Yousef's statement to be true.
If (217,000 x 2,000) > 780,000,000, Yousef might be telling the truth.
If not...
To save time, here's my original post and its conclusion:
Depreciation per chip: $22.50
(Based on Intel's depreciation estimate
for Q4, deducting 25% for other businesses,
dividing the rest by production of 26M
CPU's in Q4)
Wafer cost including direct labor, materials: $21.25
(This number makes sense because there's
about $2,000 in costs per wafer and no more
than 100 good chips with Celeron's huge die
size.)
Packaging and testing costs: $5.00 (PPGA 370 package), $15.00 Slot 1
R&D per chip (allocating 2/3 of $630M to the CPU business): $16.15
Marketing, Gen., Admin. per chip (allocating 2/3 of $766M): $19.64
Total cost per Celeron chip: $84.54 (PPGA 370), $94.54 (Slot 1)
Celerons ARE being sold below cost. How could it be otherwise? Intel has an average selling price over $200 and their gross margins are about 55%, exactly as my math confirms above.
Petz |
