Intel Corp (INTC)

[jhalada]

wbmw,

Here's the list I've seen:

Looks like you are using discontinued parts on your list to make a point. The $21 part has a grand total of 3 motherboards listed on newegg, one of them out of stock.

The low end parts are in the range of $21-28, the mainstream are $29-40, the high end are $50. Given a volume mix of 30/60/10, that's an ASP just north of $32. At this point, you have to figure in an extra 10-15% standard discount due to volume or bundle purchases, which brings the ASP south of $30.

I guess the problem is that the low end, which should be skewing things to the low priced chipsets is much more likely supplied by 3rd party chipset vendors, so Intel chipset ASPs are skewed to the higher end.

Conveniently, there is an article out today proving both of my points:
Intel resuming 865-series chipset production may negatively affect third-party suppliers
http://digitimes.com/mobos/a20060124A2006.html

Meaning that 865 line was discontinued, and that resumption of the low end chipset will affect thrid party vendors.

Curiously, the link shows that SiS and Via are able to make gross margins of 34% and 22% on the el-cheepo stuff, below Intel's lowest end, but Intel can only make 15 to 20% on the mainstream and premium stuff. Sis and Via are using foundries (at full prices including profit for foundry), Intel is using depreciated fabs, keeping the profit.

May I suggest that when this deep in a hole, that you stop digging?

Another suggestion: step back to review what you are arguing. Your argument that Intel CPU cost is (substantially) lower than AMD's depends on you proving that Intel cost of producing a chipset is roughly the same as cost of producing a CPU. This argument obviously does not pass the smell test.

Well sure they can. They have the ASPs of CPUs in front of them, and a good, educated guess as to the ASPs of chipsets (MCH+ICH combos) that I provided above. They can also judge for themselves if chipsets have a high GM of 35% like you suggest, or if they are more familiar with this business they can use the value of 15-20%, which I believe is more standard, and does not constitute "losing money" or "predatory pricing", like you shamelessly suggested in a previous post.

Ok fine. The same article proves my third point: Sis makes money with 34% gross margin, Via loses money with 22% margin. Therefore, would Intel make money in:
- Your scenario of 15% to 20% gross margin? Answer: No
- My scenario of 35% gross margin? Answer: Yes
http://digitimes.com/mobos/a20060124A2006.html

Joe