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Technology Stocks : Silicon Graphics, Inc. (SGI)
SGI 90.67+1.8%10:18 AM EST

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To: Paul Jamerson who wrote (467)12/2/1996 9:39:00 PM
From: Michael Madden   of 14451
 
Re: Can Custom RISC chips remain viable?

> RISC and CISC are converging. In the next few years there will be
> very difficult to differentiate. As you said the cost will be the
> differentiator. Ten years from now, it will be Intel, PowerPC
> (because of IBM's deep pocket) and possibly DEC. SGI won't be in
> the uprocessor business and SUN Micro will be out of custom RISC.

Actually, I believe MIPS has a better chance of surviving than the
DEC Alpha. I hinted at the reason in in my last post. Most investors who look at the microprocessor market from a workstation/server perspective miss half the picture. The embedded processor market is much bigger than than the computer market. MIPS has been gaining a pressence in this market. The PowerPC chip is in position to be the successor to the most popular embedded chip family in the world, the Motorola 68000 family. (Motorola is a PowerPC partner with IBM and has already proclaimed that the PowerPC chip will replace the 68000 series in their embedded board products.) The DEC Alpha has almost no exposure in this market. The Alpha will only survive if DEC finally does get that boost in NT workstations and servers its been hoping for. Frankly, I doubt it will happen; even if it does, it still may not sell enough processors to make the Alpha economically viable. If SGI can continue increase its marketshare in embedded processors while moving its customers to its next generation chips, MIPS will be around a long time.
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