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Politics : Formerly About Advanced Micro Devices
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To: Paul Engel who wrote (58575)5/18/1999 9:25:00 AM
From: Kevin K. Spurway  Read Replies (2) of 1571927
 
Re: "What if the cost of the P6 core development has already been depreciated or expensed?"

R&D was only 14% of Intel's operating costs last quarter. Let's say that the Celeron core R&D was completely depreciated (assuming it was capitalized in the first place, which it probably wasn't) by now (and it probably isn't entirely because of the 128k of L2 that Intel added to the P6 core). There is undoubtedly still speed path work going on with the Celeron, now to mention process-related R&D expenses which are attributable to the Celeron as well. But the bulk of Intel's costs are cost of sales. Since the raw materials used to manufacture a Celeron versus a Xeon aren't significantly different in price (there is more to the Xeon in terms of mechanical parts but the Celeron has a larger die) then the bulk of Intel's expenses come down to manufacturing facilities. And expenses/depreciation from facilities should pretty much be carried evenly over all of Intel's microprocessor product lines.

Kevin
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