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

To: Amy J who wrote (133784)	5/1/2001 12:18:18 AM
From: pgerassi	Respond to of 186894

Dear Amy: I was hitting on the fact that if P4 ASP is cut in half, this forces all other desktop prices to follow suit. Since even Intel claimed that IAG ran at sub 50% GM in Q1 (and I believe that non IAG divisions include expenses that should count in IAG), that GM thus must be less than zero. If unit sales are the same, the increased cost of P4 and more P4s being sold, will exacerbate the negative GM. And I define dumping as negative GM. Now you can set the even lower limit as the marginal cost of an additional P4 being manufactured as the limit for true dumping charges (IMO the FTC & AG sets it higher than this). But they do subtract any rebate whether direct or indirect from the price received before comparisons are made. I believe someone said that the marginal cost of a Coppermine CPU at being around $30 and someone else estimated that P4 is around two to three times this, but others say it is much higher than that. This all assumes a positive GM. The bar is much higher, if GM is negative, since IIRC the FTC includes a portion of fixed costs because negative GM shows that the plant and equipment is not fully paid for. This could easily double that and we get to $200 each P4 (bin taken into account). All of a sudden, a dumping charge is not far fetched. Is this likely? No! Intel would suffer too much in the stock market before it got that close. Pete