IBM Message Board - Msg: 3762531

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Technology Stocks : IBM

IBM 309.39

+0.5%

3:59 PM EST

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To: J R KARY who wrote (2660)	3/19/1998 4:47:00 AM
From: Toby	of 8218

IBM's new foundry strategy makes outstanding business sense and further illustrates how IBM is determined to milk more money out of it's R&D and technology investments. Imagine, IBM has the industry leading Si technology, but is perhaps only the 8th largest manufacturer of Si chips in the world. Only recently have the even begun OEM delivery. Foundry resembles IBM's wildly successful storage strategy. Leverage industry best technology to dominate the attractive high end marketplace and leave the previous industry leaders to slug it out in the commodity arena. In Si, this means IBM can charge attractive margins for access to .18um Cu technology whereas the Taiwanese fabs can only offer .25-.3um conventional foundry services. IBM gets more revenues, some of which can be used to keep R&D vital and maintain its lead vs Intel and the rest. This is my kind of service business.

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