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To: Petz who wrote (194015)	4/17/2006 7:03:55 PM
From: UpNDown	Respond to of 275872

Petz, on equipment depreciation And there is another interpretation of lower depreciation, and that is that they began to stop using some Fab 30 equipment before the end of the quarter. People here seem to think that the Fab as a whole is depreciated. Each piece of equipment, though, is depreciated separately. I believe the depreciation schedule is 5 years (6 for Fab 26), so the last depreciation (to simplify, 20%, 20%, 20%, 20%, 20%) on the equipment that was purchased earliest in Fab 30 ramp-up has now been taken. The pieces of equipment are no longer depreciable, and more and more will enter that state as we go along. There is no indication that the equipment is not in use, however. Depreciation is just the allowable method of transferring capital expenditures from assets to expenses over time.