Advanced Micro Devices Inc (AMD)

[Petz]

AMD's cost per CPU is definitely lower than Intel's.

Intel had $900M of net income (profit) in Q2 and sold about 30M CPUs. Clearly, if the ASP dropped by $30, Intel would be profitless.

There might be some controversy abou the ASP of Intel CPUs, but it is certainly in the range of $150 to $190.

So, if Intel could only get $120 for their CPUs they would at best be profitless, and at worst have a $1.2B loss.

AMD had CPU revenues of $402M, selling about 6.5M CPUs at no more than $62. (It could actually be 7M at $57.) AMD's net loss was $140M.

So if AMD's CPU's sold at the same $150 that results in an Intel breakeven or Intel loss, they would have 6.5M x (150-62) higher revenue. THis is $572M!

In other words, if AMD and Intel both sold their CPUs for the same amount, $150, Intel would be profitless or even have a $Billion loss.
AMD would be wildly profitable, have a pretax profit of $432M, which would be a net profit margin of over 33%, higher than Intel ever had in its history.

Clearly, AMD's cost per CPU is way below Intel's.

Petz