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To: Dan3 who wrote (81)	9/18/1999 8:28:00 PM
From: kash johal	Respond to of 271

Dan, Re:"depreciation" Well even if depreciation is $4Bn. With intel at 120M+ CPUs next year that $35-40 per CPU. Anyway you cut it they are in an awesome position. They have gotten rid of the slot 1 crap as well as expensive external cache and have reduced packaging costs with the OLGA. Previously their ASPs have averaged $200-220 and margins ahve averaged 50percent plus. They are slashing internal costs and CPU manufacturing costs. It should be easy for them to average around $200 a CPU next year and have truly blow out numbers again even IF AMD does reasonably well. AMD doing well next year for me would be 20M CPUs with average ASP of $150-175. If AMD screws up and dresden/cu flops Intel will be in a great position of course. PS depreciation is NOT part of raw costs. Intels costs have been in $80-90 rnage in past. So u can see how Intel may even get their biz up to a 65-70 percent gross margin. So a $100+ stock price may well be justified for next year. regards, Kash

To: Dan3 who wrote (81)	9/18/1999 9:43:00 PM
From: Charles R	Respond to of 271

Dan, <Coppermine 256 in prices of $120-300 range at speeds of 667-800Mhz... I don't think Intel can afford to do that. Their annual depreciation is $4 Billion. These numbers are WAGs, but I think they've been covering that by doing something roughly similar to applying $200 to each of the approximately 20 million high end processors they sell each year - can't see where else they can put such a cost. So figure those coppermines at $50 for materials and $200 for depreciation for a total cost basis of $250.> With CuMine, Intel will be profitable even if the ASPs collapse to $100. Also, note that these things are dynamic. If Intel's management suspects that they are getting there, I am sure they will address the cost structure to squeeze out a little bit more profit. Chuck