Intel Corp (INTC)

[jhalada]

Dan,

What does it cost Intel to FAB, package, and test one of those die, then put it in a box with a good quality heatsink and fan and ship it to one of the dozens of on line retailer who sell it for <$40 after making some markup?

The packaging and testing these is the same as $200+ SC Pentiums or mobile Pentiums. Packaging the box + HSF is probably in mid single digits. What Intel receives for the processor alone may be in low 20s, which is roughly at cost (zero gross margin), possibly even below cost (negative gross margin).

Obviously, they aren't recouping any general, marketing, administrative, or FAB costs, but they can't even be recovering marginal costs.

Nothing left for those.

Intel can probably cover the variable costs, but only a fraction of fixed costs. Recovering even a fraction of fixed costs would be a good thing (compared to unused capacity) if these units sold were truly additional units. Some of these may be new units (that would otherwise go to VIA) but some of these may be cannibalizing more expensive Celerons...

Joe