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To: Elmer who wrote (46660)	7/8/2001 11:15:20 PM
From: Paul Engel	Read Replies (1) \| Respond to of 275872

Elmer - Re: "AMDolts believe that any market share short of their entitled number is proof of Intel's wrong doing and justification for Government(EU) intervention. " Thanks for your "diversity" of thought !

To: Elmer who wrote (46660)	7/9/2001 9:36:32 AM
From: combjelly	Read Replies (2) \| Respond to of 275872

"Intel could have easily demonstrated they were selling Celerons at a profit based on standard wafer costs, yields, packaging costs and general manufacturing overhead." The general perception amongst many, including anti-Intel "Microprocessor Report", was that Intel was selling at, or below cost for their low end parts. "Is the US a member of the EU?" I missed that. But considering that the trade rules in the EU are often a lot looser than in the US, I suspect that we have something similar. The problem is that Intel is the dominate player, and they have different rules.

To: Elmer who wrote (46660)	7/9/2001 1:42:37 PM
From: Petz	Read Replies (1) \| Respond to of 275872

Elmer, you better re-sharpen your pencil. MG&A (mostly marketing) cost per CPU at Intel is $46, if you assume they sold 25M this quarter. By contrast, in Q4, AMD's MG&A cost per CPU was $20. I'm sure Intel has lower "General and Administrative" overhead per CPU than AMD, so at least $32 per CPU is pure marketing costs. I'll discount that by 25% since Celerons get a little less direct marketing. Intel will spend $7.5 billion for CapEx this year. If we just allocate 9% of that to Celerons and assume 40M Celerons for 2001 (1/3 of total CPU units), the CapEx per Celeron is $17. Alternatively, take 1/6th of 2001 depreciation (4.1B) and divide by number of Celerons. But even just using basic "COST OF SALES" -- raw material, labor, mfg costs etc., includes depreciation, so we will subtract it out -- Q1 COS = $3,225M minus deprec=$934 = $2,291 divided by 33.7M CPU's Q1 (based on 21.2% AMD market share at 7.3M CPU's) = $67.98 per CPU I'll be generous and reduce this by 30% to account for mfg costs of Intel's non-CPU businesses (although they only contribute 23% of sales That leaves a basic manufacturing cost of $47.59 per CPU. Let's say Celerons are 1/3 cheaper to make than your average, run of the mill Intel CPU, that leaves $32 per CPU for just the basic mfg costs $32 - basic mfg cost $24 - marketing cost per CPU (but not including "General and Administrative") $17 - Cap Ex per Celeron (you get similar number by taking 1/6 of depreciation) -------- $73 Now, take a look here: pricewatch.com ......................................Intel Loss/CPU assuming ......................................10% disti profit margin $82 - Celeron 850......---- ($1 profit!) $65 - Celeron 800......$14 loss $57 - Celeron 766......$22 loss $56 - Celeron 733......$23 loss $48 - Celeron 700......$30 loss $45 - Celeron 667......$33 loss $39 - Celeron 633......$38 loss Petz