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

To: John Koligman who wrote (40466)	11/16/1997 11:13:00 AM
From: ed	Read Replies (2) \| Respond to of 186894

John: I am a INTEL investor myself, but I still like to see AMD comes to play to give INTEL a little bit pressure. As you know competition makes progress. CPQ just give INTEL some gestures that you got to drop your price of CPUs or you will lose the market shares, and we all know that AMD can't deliver enough cpus if the sub $1000 pcs really fires up. Now INTEL drops the price of low speed PII cpus , this means additional revenues for INTEL, as well as CPQ, because for the first time people can't afford buying computers have the opportunity to joint the information areana and people want to buy additional computers have additional choices, and those who can afford high price computers will still spend additional money to buy additional power of PCs, which is the middle and high end products.We will see revenue grown substantially for both INTEL and CPQ in the comming quarters. As for the profit margin, as you know we can sort for CPUs of various speeds from dies of the same wafer due to process variation accross the wafer, so , technically speaking, the cost for 166Mhz, 200Mhz, 233Mhz, are all the same, so the profit margin of 233 Mhz is higher than that of 166 Mhz. The currnt price of 0.35 um CMOS 8" wafer offered by TSMC is around $1700, for four layer process, we may assume the wafer price is around $2000 (of course INTEL's cost of wafers is much lower, since INTEL's wafers are processed through its own fabs), I may assume each 8" wafer can yield 50 good dies(of course it all depends the die size and the process, here I just make the worst case assumption), so the worst case for INTEL's die cost is $40 per good die, and add up the packaging and testing cost , I would say, INTEL's cost per unit of PII may be around $70. Of course INTEL's cost should be much lower, because INTEL has its own FABS.Now you can calculate INTEL's profit margin. Of course you should remember that PII cpus are sold with different price according to the speed of cpus.