Intel Corp (INTC)

[Tenchu]

FPG,

Being a generation ahead means you spent a disproportionate amount of money to gain that lead.

Intel is betting on the notion that their process lead will grow and that others won't be able to keep up without having to spend said "disproportionate amounts of money."

Well see whether that process lead can actually translate into better components that customers would pay a premium for. It might take a while, but that's the kind of long-term strategy that plays to Intel's strengths. Then Intel can just integrate everything but the kitchen sink into their silicon and gain advantages that the "roll your own IP" folks can't match.

And if that doesn't work, maybe Intel has a bright future as a premium foundry, LOL ...

OTOH, Qualcomm's margins are higher than Intel's...

30% of Qualcomm's revenues are from licensing, which makes sense given that QCOM used to be an IP-only company. Take that away and Qualcomm's margins should be more comparable to Intel's.

Tenchu