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

To: Dan3 who wrote (153844)	1/5/2002 1:19:33 AM
From: Saturn V	Read Replies (2) \| Respond to of 186894

Ref < Too bad it costs them $75 per chip to build and outfit the FAB > Too bad for you Dan, that the $10 chip cost( optimistic estimate by Elmer), already includes FAB depreciation. If you know anything about accounting you will know depreciation absorbs the cost of building and outfitting the FAB. Thus the cost estimate will include the cost of the FAB ( albeit over a five year period). I am sure that Dan, you were aware of that, but you had to continue to dwell in your FANTASYLAND mode.

To: Dan3 who wrote (153844)	1/5/2002 5:33:55 PM
From: Dave	Read Replies (1) \| Respond to of 186894

Dan, Too bad it costs them $75 per chip to build and outfit the FAB. No one expenses the costs of a fab and its equipment. Instead those costs are CAPITALIZED and depreciated over its useful life. Additionally, the DEPRECIATION expense is factored into the Cost of Goods Sold. Therefore, a per chip cost would include depreciation. Additionally, the more chips Intel sells, one should reasonably expect a decline in per chip costs, hence higher gross margins, all other things being equal, i.e. chip ASPs. Now, as to General and Administrative expenses and Sales and Marketing expenses, G&A would be fairly fixed and INDEPENDENT of the number of chips sold. Therefore, if Intel Sells more chips, one should expect that G&A per CHIP to decrease. Now, as to Sales and Marketing expenses, a portion of that cost is fixed and I would venture to say that another portion is tied to the number of chips sold. Therefore, if a company sells more chips, I would expect Sales and Marketing to increase, likewise. If you truly hate Intel and wish to short it, I have a "few" shares that I'd let you borrow to sell... <g>