Replies to post #33974 on Intel Corp (INTC)

[chipguy]

I sure hope you don't BS about chip manufacture the way you are BSing about accounting.

That was completely uncalled for.

[alan81]

Gee thanks...
I think this is the statement that got me in trouble:
AMD has been ramping fab 36, and that costs money
You interpreted this as non-recurring costs, while I was referring to recurring costs. Personally, I thought that obvious since the non-recurring costs started well over a year ago, while Q3 is the first time they will have any recurring (shipment related) costs.

I'll take another stab at WHY I think this is important. Q3 is forecast to be about $1.3B, which is the same revenue AMD had in Q1 2006. They achieved that revenue with ONLY the expenses of fab 30, and no fab 36 output. In Q3, they will have some fab 36 output supporting that revenue level. That means the $553M COGs (cost of goods sold) that we saw in Q1 is a very low estimate and we should expect something a bit higher. That's all.
--Alan

[herb will]

"I believe AMD uses a cost recovery method which estimates the total number of units the plant will produce over its lifetime attributable to the improvement and then deducts a aliquot amount as each unit is produced. This has the advantage of paring the expense with the periods which have the volume."

According to the last 10 k footnotes AMD uses straight line depreciation.

"Property, Plant and Equipment. Property, plant and equipment are stated at cost. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets for financial reporting purposes. Estimated useful lives for financial reporting purposes are as follows: equipment, two to five years; buildings and building improvements, up to 26 years; and leasehold improvements, the shorter of the remaining terms of the leases or the estimated economic useful lives of the improvements."