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Technology Stocks : Intel Corporation (INTC)
INTC 45.51+10.6%3:59 PM EST
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To: AK2004 who wrote (13602)3/9/1997 4:09:00 PM
From: Merlin   of 186894
 
Albert,

Nice summary. I would add that with respect to point #4, about
a year ago Andy Grove commented that you cannot keep investing
at a rate of 30% per year in an industry that is growing at
20% per year.

The corporate desktop and consumer markets will eventually be less willing to pay for more performance than they really need. Intel is working very hard to expand the PC market rather than sit back and wait for the PC sellers to do it because they have to maintain the overall market growth.

I think that if Intel cannot shake off AMD and Cyrix in the next
year or so, that they will focus on the high end and go after DEC
and Sun. AMD can comfortably grow into selling microprocessors as
an appliance component; for Intel it would be a step down. Intel is
still the 500 lb gorilla and won't be chased out of any market,
but they are going to have to make some choices with respect to
balancing high volume/low margin product against low volume/high margin parts.

Total 16 bit and 32 bit microprocessor sales in 1995 were about
80 million. As you stated, 30 million microprocessors exclusive
of the Dresden fab is a significant number. If the AMD 30 million
number is for K5 and K6 alone, then it is even more significant since
margins for computer cpu's are larger than that for embedded controller applications.
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