Intel Corp (INTC)

[alan81]

INTC capex and depreciation,
Here are some numbers to ponder:

 
 year capex  depreciation capital  depreciation time 
                                    capital/dep 
 2010 5.2       4.6        17.9      3.9 years 
 2011 10.8      6.0        23.6      3.3 years 
 2012 11.0      7.5        28.0      3.7 years 
 2013 10.8      6.8        31.0      4.6 years 

Note that R&D is not depreciated but expensed in the year it is spent. Intel appears to be depreciating new fab capital in about 3 years or so. I expect 2014 depreciation guidance to be substantially higher at about $8.4B, which will be reflected in their GM guidance. They go from about $1.7B/quarter to $2.1B/quarter, or an increase of about 23% when moving to 14nm. We will see actual guidance on Thursday and see how close this is. If revenue stays about flat, an increase in depreciation of around 23% could impact gm by about 8% or so.
Alan