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

To: Elmer who wrote (61121)	7/25/1998 9:34:00 AM
From: Jim McMannis	Respond to of 186894

Elmer, RE:"I think Paul's numbers are much closer to the true costs than yours as he has shown many times he has close contacts inside Intel. And I would also question your yield estimates. On what are they based?" I've gone into that on the AMD thread. I'm not exactly sure about Intels yields. Perhaps you or Paul could venture a guess. 70%, 75%, 80%??? Assuming, say, 75% yield, that's about 105 good die/wafer. Wafer cost at say $2500=23.80/die. Double that for packaging plus $10=$57.60. (I figure that packaging has to cost at least $10 more for the Celeron because of the slot one cartridge). So Ok, Mendocino could be in the $50-60 range less fixed costs of course. Actually, at $35 I was being a bit conservative for the K6. Even with lower yields, some if not all of that is made up by the lack of the cartridge don't you think? Feel free to add your input. Jim

To: Elmer who wrote (61121)	7/25/1998 9:57:00 AM
From: Jim McMannis	Respond to of 186894

Elmer, One more thing, notice how the attention has gravitated to the mid-lower end of the processor spectrum as opposed to a year ago when the power of the Pentium II was the hot topic. At that time, people were benchmarking the Pentium II with the cache disabled and saying how dependent the Pentium II was on L2 cache and how slow the core processor really was. Kind of ironic that Intel has actually come out with a cacheless Pentium II. That's interesting but not really my point. The point is the gravitation to the lower end, more specifically selling say a Celeron in the sub-$100 range. Intel can still make a good profit but for Intel this is approaching what is called a "lost leader", or a key product offered at greatly reduced margins. A sign of a really competitive market. No wonder some Analysts are leery of Intels margins. Also, isn't this a new frontier for Intel? Jim