DZ mentioned during the earning. Asset under constructions is down from the previous stated $50B to high mid 30B. The number will further go down next year. They are digesting those assets. I guess they can just complete one shell for Ohio (skip the second one) and delay installation till there is concrete demands for its process (18A or 14A).
Intel Reports Second-Quarter 2025 Financial Results
- Thread starter hist78
- Start date
Who told you that?
They do down to 14nm for some product type , the Singapore FAB I think do 22nm at best at the minute.
As a supplier we know what they are doing.
22 nm and 28 nm are considered the same process node.
UMC tried 14nm so many times.
Yes, I did not include depreciation , but I do regard R&D as part of labor.
I stand by my point. I’m just doing a rough estimate.
IFS has already purchased the EUVs.
Given the second-source and tariff concerns, I figure Apple and others would accept a selling price of around $1.10 or even $1.20.
This implies they may offer little to the 12nm joint venture with Intel.
Artificer60
Well-known member
I would not discount the value of foundry experience and an opportunity to prove that Intel can operate successfully as a foundry.
Lame strategy.
I think the problem is the US environment. I find it corrupted in same way from the very top:
For Lip-Bu, his job is to recover Intel financially and make it relevant regardless of the political environment.
No, Intel needs to know its limits and focus on AI, which is large enough.
hist78
Well-known member
Let me explore this a little further:
There are two types of labor expenses. The first is direct labor expense, which is directly related to the manufacturing of semiconductors. This type of labor cost is included in the Cost of Goods Sold (COGS) and is factored in when calculating Gross Profit.
Revenue – COGS = Gross Profit
The second type is indirect labor expense, such as wages paid to HR, finance, and marketing personnel. This is part of operating expenses, but it’s just one of many components within the operating expenses.
Gross Profit – Operating Expenses = Operating Profit
In your calculation, I believe you attributed the 10% difference between Gross Profit Margin and Operating Profit Margin to labor costs. However, this assumption is questionable. That’s because direct labor expenses, usually a significant labor component in semiconductor manufacturing, are already accounted for in COGS and reflected in Gross Profit. We can't count them again when analyzing Operating Profit.
The indirect labor costs mentioned earlier are typically much smaller in proportion and are included under “Marketing, General, and Administrative” (MG&A) in financial statements.
On the other hand, R&D expense is typically a large and distinct item within operating expenses in the semiconductor manufacturing business. It is usually listed separately in financial reports and is not grouped with either direct or indirect labor expenses.
In the diagrams below for 2024, TSMC reported US$6.355 billion in Research and Development spending, while Intel reported US$16.546 billion.
TSMC 2024 Revenue, Operating Profit, and Net Profit
Intel 2024 Revenue, Operating Profit, and Net Profit
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Yes, I used a 2:1 ratio for Intel:TSMC .
This assumption is overly simplistic and biased.
But it won't change the point of view.
If Intel Foundry’s competition forced TSMC to cut prices by 10%, do customers actually pocket that 10% savings? No, because their competitors also benefit from the lower costs, keeping the playing field level. That's why those customer will not take risk of their core business to help Intel.
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siliconbruh999
Well-known member
Either that or pay whatever TSMC wants you to pay even Nvidia being a $4 Trillion company can't do anything