Replies to post #129282 on Intel Corp (INTC)

[wbmw]

What structural advantage does MediaTek have over Intel in the sale of $10 chips?

>> They don't spend ~$5B/Q for R&D and SG&A.

They also don't have a server and datacenter business, a desktop business, a laptop business, a network and storage business, an embedded business, a security and real-time OS business, or an in-house IP development team creating custom cores, graphics, camera ISP's, high-speed I/Os, network fabrics, advanced caches, advanced packaging, advanced firmware development, driver development, software development, they don't have the same staffing of sales teams, worldwide marketing teams, channel support teams, customer support teams, ISV enabling teams, software optimization teams, industry standards participation, reference board design teams, or ecosystem enabling teams.

Mediatek is a company that uses 3rd party IPs to design cheap SOCs for low-end phones and tablets, while riding on the coattails of ARM and the ARM ecosystem to enable their designs, and TSMC to supply their IP portfolio and foundry services. They also have very targeted marketing teams capable of a hand full of big design wins, while relying on the China tech ecosystem to do the rest. Hence, their R&D and SG&A are a fraction of a company that does what Intel does. They succeed because they are really good at maximizing volumes within that kind of spending budget, but it's a fragile business model that can be easily broken by a well funded company like Intel targeting their business with better products, better marketing, better sales, better support, etc.

[chipguy]

They don't spend ~$5B/Q for R&D and SG&A.

LOL, you think they get processed wafers at marginal cost?

No such a thing as a free lunch.