Intel Corp (INTC)

[DewDiligence]

>> We welcome other points of view here but you're way off base on this one. By excluding R&D the cost of Banias will probably be well below $25, regardless of speed. It's easy to calculate based on wafer cost and die size. <<

EM: are you including the cost of owning and running the fabrication plant that is used to make the chip, including the salaries and benefits of the personnel at the plant, electricity and other utilities, depreciation of the equipment and real estate, etc.?

Didn’t think so.

It’s a common misconception that these costs are in the SG&A line on the income statement, but that is not the case. Facilities costs for the manufacturing facility used to fabricate the chip are included in the “cost of good sold” (COGS) line.

I’m glad you posted because now I can see why you and wbmw are way too low on your estimates for Banias’ COGS and consequently way too high on your estimates for gross margin. Regards, Dew