Replies to post #127382 on Intel Corp (INTC)

[fastpathguru]

"Intel's 14nm fab expenses haven't even started depreciating yet..."

Cost of Sales begin when there are sales?

Come on... Intel doesn't sell anything now?

The whole point of this thread is about Intel's accounting (or lack thereof) of exorbitant R&D+CAPEX spending in their gross margin. You yourself tied the accounting to the inclusion of depreciated CAPEX in Intel's COGS. If Intel's depreciation of recent R&D+CAPEX aren't reflected in depreciation, then they aren't reflected in Intel's COGS. I.e. Intel's huge investments in their bleeding edge aren't (fully) reflected in Their GM. (R&D, which is much larger than CAPEX, never is.)

(But R&D and CAPEX are reflected in the fab-lite model, where these costs are (more than) accounted for in, say, AMD's chips.)

Which was my original point.

fpg

[walbert]

"Intel's 14nm fab expenses haven't even started depreciating yet..."

[And yet Intel has already said that they can maintain margins going forward. Intel can spend like drunken sailors on fabrication, pay a dividend, spend billions on R&D, invest in 450mm technology, generate incredible capacity and still fit all of this within their free cash flow with no real problem.

They can do this AND stay on the Moore's Law curve. ARM can't do any of this. They don't have the economics or the funding. With new nodes costing them more and not less, their fabrication model is totally broken.

It's all about the economics going forward.]