Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 40.51

+0.4%

Dec 9 3:59 PM EST

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To: dumbmoney who wrote (81591)	5/26/1999 7:17:00 AM
From: GVTucker	of 186894

dumbmoney,RE:<<Scumbria, if AMD wants to sell CPUs for $400 they should halt construction of the Dresden fab immediately. There is way too much capacity coming on line. It's suicide.>> That is precisely the attitude that Intel faced pre-Pentium era. Intel was alone in predicting PC volume growth in the 90's, and embarked on a capacity expansion that many considered suicide. That's why you could buy Intel at 10x earnings a decade ago. The prescience is Andy Grove's greatest legacy. If AMD is to succeed, against the longest of odds, they must structure the firm assuming that they will succeed. That means that K7 will be a home run. If that is the case, the added capacity is a must. Will AMD win? Probably not. But if they don't add this capacity, they guarantee that they won't win. Might as well give it a shot.

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