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

To: Dan3 who wrote (137026)	6/8/2001 1:23:47 PM
From: Tenchusatsu	Read Replies (1) \| Respond to of 186894

Dan, <Just my assessment.> No offense, Dan, but you're trying to refute all of the benefits of 300mm research of Intel's TMG division with a single post. It's one thing to just stand up and say, "I doubt it." It's yet another thing to come up with fuzzy math and pretend you're smarter than the guys paid to make the billion dollar decisions. Tenchusatsu

To: Dan3 who wrote (137026)	6/10/2001 8:27:08 AM
From: Dave	Read Replies (1) \| Respond to of 186894

Dan, Capex is running $7.5 Billion per year, and Intel sells about 120 million CPUs per year, so I get capex costs of $62 per chip. Two years ago, they were selling about the same number of chips, at a $200 ASP, and capex costs were half what they are now. Now capex costs are way up and ASPs are below $150 and dropping fast. One thing, you are trying to "expense" intel's capex costs. Whenever a company adds Plant, Property and Equipment, instead of being "expensed", it is "depreciated" over the PP&E's life. Therefore, assume a 5 year life of the 7.5B Capex. That's 1.5B/year and divide that by 120M chips. Division tells me about $12/chip for depreciation. Also, due to "pro-forma" Income Statements, some companies only report "cash earnings" and exclude Depreciation/Amortization, and that's how analysts get their numbers....