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Technology Stocks : Intel Corporation (INTC)

INTC 42.61

+6.5%

Jan 7 3:59 PM EST

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To: Amy J who wrote (90215)	10/14/1999 8:21:00 AM
From: AurumRabosa	Read Replies (1) of 186894

Amy, Wouldn't that be nice if Intel was truly immune to the Taiwan induced shortages. Intel management may actually believe that but I think they're deluding themselves. Taiwan produces 80% of the world's motherboards and those factories went down in the quake. MB factories are much easier to start back up than a semiconductor fab but it did stop production for at least 2 weeks. DRAM chips have been put on allocation (i.e., rationing) for the time being. Thanks to the RMBS Camino chip set fiasco fabs that had converted from making DRAM to Rambus memory have stopped production and are switching back to DRAM. Soon there will be a glut of DRAM but not in time for the xmas season. The big killer is the impact to graphics chip makers. Why would a box maker build PCs and stock them in inventory if they cannot get a graphics controller board. DELL will be seriously impacted by this since they practice JIT to the extreme and that explains why insiders are selling tons of DELL stock in a real show of faith. So you buy the dogmatic claim that Intel can sell all the CPUs they can make even though box makers cannot get all the parts they need to build the PCs? On the Micron Only thread Fabeyes and I discussed in detail what's involved in restarting a fab after a power outage. I predicted that almost all of the quartz parts, and all of the quartz diffusion tubes would have to be replaced, and it appears to be true. There's not enough quartz spares in stock to handle that and I'm sure the qaurtz parts makers are working a lot of overtime. Don't be fooled by carefully worded press releases that give the impression that Taiwan fabs are back up to production. Just because you can get one tool in each operation online and run a wafer through the fab it's a long way to being "fully" up to production. Ask Process Boy for the honest truth of how much work and time it takes to re-qual a downed fab. He's fond of discussing Intel's Top Secret P858 process in public and giving the impression he's sharing valuable insider information with all his INTC investor brethren. Put him to the test. Taiwan built their fabs to the highest earthquake standards so the buildings were not damaged. However, they forgot one little detail, they did not bolt the tools to the floor and they walked and broke all the quartz transfer tubes. There's been a lot of spin put on trying to play down the impact of the Taiwan earthquake to the semiconductor industry and Intel is not immune. Do you genuinely believe Taiwan will not hurt Intel CPU sales? By the time you find out next year INTC will have slumped well off its highs. INTC goes flat for 2 year periods as you can clearly see from looking at INTC's price chart. INTC also has many 30% and 40% drawdowns. You may be willing to ride them out, I'm not. Best of luck to you.

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