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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (33611)	6/29/1998 3:43:00 PM
From: Petz	Respond to of 1583404

Kash, re:<It would be inconcievable to me that INTC's wafer cost would be higher than $2500 even with very high depreciation.> ONCE AGAIN, depreciation is NOT part of "wafer cost." Here's the formula: PROFIT = SALES - R&D - DEPRECIATION - G&A - CostOfGoodsSold GROSS MARGIN = 1 - CostOfGoodsSold/Sales CostOfGoodsSold = Raw Wafer Costs + FabSalaries + Resources Costs (Electricity, Heat, chemicals, etc.) + Packaging Costs + Testing Costs The first three of these, raw wafer, salaries, resource costs are the definition of "wafer costs." Petz