Intel Corp (INTC)

[Unkwn]

AMD only has to pay a small FORTUNE for Glofo fab costs due to the extortionate and most one side agreement I have ever seen in business and which has wiped out any small profit AMD has made for years now.

The agreement has been re-negociated last year. Especially the take or pay agreement has been changed to AMDs favor. Also, AMD lets Samsung fab as well, not just Globalfoundries.

This does not even include the foundry margin (40%?) that Glofo has to charge any customer and could even be more as Glofo must pay Samsung a margin due to their inability to create and new CPU process since the incredibly late 28nm.

So you have all customers from Samsung and Globalfoundries pay for the 14nm process development. Now you have Intel with its own products in a stagnating market paying for that expensive process development. I strongly believe that Samsung and Gobalfoundries together can do that at lower cost than Intel.

Intel has a high margin, that is true, but that is also their weak spot, since they can't afford to let those high margins go since, they need the money for the development of new processes. At Globalfoundries and Samsung, many customers, including internal ones at Samsung (including partially its huge memory business), are paying for that development.

We'll see how this ends. I don't believe Intel's stories about cost leadership anymore. SOFIA kind of proved that Intel is in a bad cost position.