Intel Corp (INTC)

[Unkwn]

Apple will NEVER use Intel Custom Foundry!

Man, this guy really has an agenda - just like Andy does!

His reasoning about costs of Intel being lower due to rumors Otellini not having wanted to produce chips for the first iPhone due to costs really is weak. If he hasn't more information than anyone else about Intel's current cost structure and that of TSMC and Samsung, he should just shut up.

Just ask one question: Why should Intel have higher costs than TSMC? According to the past Capex figures, TSMC just needs to invest as much as Intel and the others to keep up (actually TSMC isn't keeping up technologically, but, well ...). Sure, Intel may have higher variable costs, like personnel etc. Does anyone think that is significant for a multibillion fab that gets depreciated so quickly? Ok, yields and time to manufacture the chips are also important, to really squeeze out the maximum capacity out of those expensive fabs. Yields are, historically, said to be good at Intel. It may be that TSMC is better with that, but on the other hand, their process structures are larger, so let's call it an even. Time to manufacture a chip - I have no clue. Can anyone share information on that? I would have thought this is pretty much given with structure size and cannot be influenced much. If there is something to make more efficient, I think Intel can do it just like everyone else.

So, the question, Andy (maybe you can at least once share some of your knowledge): Why should Intel have a cost disadvantage?

Now: Even if Intel has a cost disadvantage: Why should it matter? TSMC doesn't have a high margin core business like Intel (or Samsung) does. That already pays for the fabs. Every additional business helps spreading those high fixed costs and therefore adds value with every additional chip fabbed.

Funny also how he suddenly calls Samsung a fab - as if this was Samsung's main business. Also for them, it's just incremental to what they have available for their own products and leverages their investments. Very much how it could be with Intel, simply if they would execute as well as Samsung does (sorry, but I'm biased there).

Just imagine Samsung, Intel and TSMC competing for the same customers. What would that do to pricing and market share for TSMC? I see no way this is going to end well for them. Samsung already started to take market share from them and Samsung has a very well running memory and application processor business, with one customer guaranteed to take all of the production - Samsung itself! What would Nanny say to this?