Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: semiconeng who wrote (124861)	1/14/2001 2:19:35 AM
From: Dan3	Read Replies (1) \| Respond to of 186894

going by the prices charged by Dell, Compaq, etc., Where did you get these figures from? Thin Air? No, their web sites. Despite the huge premium in Intel list prices last quarter at any given speed, systems from the same company with a configuration that differs only in Athlon or PIII were not priced very far apart. From that I infer that the costs were not very far apart, either. Intel makes $90 on the chip. On the equivalent P3 they were selling this summer, they made $225 you make assumptions of cost vs. selling price, again assuming a $100.00 cost to make P3 No, the whole point of my comment was that Intel has replaced the SKU in their lineup that sold for $250 and cost $25 to make (the P3) with a part that costs them $160 ($100 for the chip and $60 for the rambus rebate). In Q1 of last year, Intel's $25 (cost) coppermine was competing against AMD's $60 (cost) cache in cartridge Athlon. In Q1 of this year, AMD's $30 (cost) thunderbird Athlon is competing with Intel's $160 (cost) P4. AMD can sell a GHZ+ Athlon at $300 list, $150 cost to OEMs, and make $120 on the chip. ---And this was the funniest part of all. After incorrectly pegging the cost of manufacturing a single P3 die as being equal to I think I've covered the issues here. Calculate past ASPs x processors sold and subtract profits to get minimum required ASPs. AMD needs average profits of $40 per chip to make any money. Intel needs average profits of $120 per chip to make any money. ---Funny how you seem to "assume" how much profit both companies needs to "make any money". I guess that we've already have seen how much knowledge of semiconductor finances you have....zero I think you protest too much, a sign my estimate is very close? Consider this. Intel sells, (used to, anyway) very roughly, 30 million CPUs per quarter. Their ASP is hinted at having gone from a little over $200 to a little under $200 during the past two quarters. 30 million times $200 is $6 Billion revenue from CPUs. Last quarter Intel had $2.8 Billion earnings from operations and $1 Billion earnings from investments. This quarter, earnings from investments will be way down, perhaps even a loss. This quarter costs are also higher (an estimate) by $400 Million as FAB construction and staffing has been accelerated. So if costs are up by $400 million, and the capital appreciation is gone, gross earnings are now $2.4 Billion. Knock $80 off the ASP of 30 million chips and revenue is down $2.4 Billion - giving Intel a break even quarter. $200 - $80 is $120, and that's where I got the breakeven number. AMD's breakeven number is pretty easy, since they were doing just that recently, (at a little over $60) and there haven't been any significant changes to increase quarterly costs the company incurs since Dresden opened a year ago (Like, say, a crash construction programs to open 3 new FABs at once). I bumped the number up to $70 to cover additional staffing, etc. at Dresden. Although the success of AMD's flash may be covering a greater portion of company costs than it used to, I tried to use pessimistic numbers for both companies. Dan