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

To: Dan3 who wrote (154598)	1/9/2002 11:41:38 PM
From: Dan3	Respond to of 186894

Re: VIA has about half the chipset market and its gross revenue for all products runs about $250 million per year That should have been "per quarter." Sorry for typing too fast.

To: Dan3 who wrote (154598)	1/10/2002 12:02:00 AM
From: Tushar Patel	Respond to of 186894

. Intel spends 9 to 10 times what AMD does on maintaining its FAB capacity Don't you think some of this spending is exactly what has enabled Intel products to pull ahead of AMD products and don't you think it helps Intel widen the lead over time? The point is that much of the spending is not to maintain competitive position but to increase the lead over competition and improve its competitive position. Andy Grove stated something to the effect that all Intel can do is outinnovate, outmarket, outspend and outmanufacture the competition. Perhaps this is what is happening and NOT what you suggest (i.e. excess spending just to maintain existing competitive position).

To: Dan3 who wrote (154598)	1/10/2002 1:16:50 AM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

Dan, Re: "Intel spends 9 to 10 times what AMD does on maintaining its FAB capacity while producing about 3 times as many CPUs." Incorrect. Intel spent many times more money than AMD in 2001 to build fab capacity for the future, and to overcome them in process technology. You are trying to prove that current spending somehow affects fab capacity in real time; or in other words, Intel's previous year's CapEx expenses ought to have given them instant capacity to make their chips. Since it doesn't work that way, your argument is erroneous. wbmw

To: Dan3 who wrote (154598)	1/10/2002 6:00:26 AM
From: Dave	Read Replies (1) \| Respond to of 186894

Dan, I divide how much they have to spend to maintain their FAB capability each year by how many chips they produce. That might be inaccurate since one cannot assume that capacity added in Q401 will be "on line" in Q401. Therefore, may I suggest you calculate CAPEX/uP by: Production(n)/Production(n-1), where n = year

To: Dan3 who wrote (154598)	1/10/2002 6:35:33 AM
From: Dave	Read Replies (1) \| Respond to of 186894

Dan, Disregard my previous post.... If one wants to measure the efficiency of capital investment, I would recommend utilizing the Fixed Asset Turnover (FAT)ratio, which is: Sales / Average Fixed Assets Additionally, the higher the number, the more efficient a company is at utilizing its fixed assets to sell goods. So I don't have to breakdown the numbers and for simplicity, I will look @ overall revenues, which reflects the overall efficiency... These number come from both company's repective 10ks on www.freeedgar.com For Intel, 2000 1999 1998 1997 Revenues 33.726 29.389 26.273 PP&E 15.013 11.715 11.609 10.666 FAT 2.52 2.52 2.36 For AMD, Revenues 4.644 2.858 2.542 PP&E 5.462 4.938 4.380 3.799 FAT .893 .613 .622 As you can clearly see, Intel's Fixed Asset Turnover ratio is >>> than AMD's FAT ratio, hence by definition of the FAT ratio, Intel is more efficient...