The following article is available at the money magazine site.
pathfinder.com@@Vz6BTwYAypjnuozB/money/moneydaily/latest/index.html
While all will not agree with everything, I think it is one of the more balanced articles that I have seen on the INTC vs AMD debate. I have pasted the authors three key conclusions for fast reading.
New K6 chip likely to sting Intel, but poses no threat to its dominance
For one thing, the market's big enough for both companies to thrive
First, AMD may be able to catch up to Intel for a brief period. But because Intel has spent so much on research and development over the past five years or so, it will be able to once again move one step ahead of AMD.
"The key to Intel over the long term is its ability to come out with successive generations of microprocessors and keep pushing the envelope," says Stephen Cohen, the director of technology research for First Albany Corp. "There is no evidence that this has been disturbed in any way."
Cohen points out that the Pentium has been out already for two years, but AMD is only now getting out a competing chip. When Intel releases its next generation Merced chip in 1998, it will once again be way ahead of AMD. Merced is a next-generation 64-bit microprocessor that Intel has been developing with Hewlett Packard.
"AMD won't be a threat unless it can come out with competing products much more rapidly after Intel plays its card," says Cohen. "If you come in two years later, most of the cream is gone. AMD is fine and it is a great stock. But just because AMD is doing well does not mean Intel will get hurt."
Second, the leading computer producers who buy Intel's products may flirt with AMD, but they will be cautious, for fear of losing touch with Intel. "AMD clearly is a credible player," says Rob Chaplinsky, a semiconductor manufacturer analyst with Hambrecht & Quist. "But they have a lot of work to do in terms of attracting tier-one original equipment manufacturers." Companies like IBM, Compaq and Dell won't want to jeopardize their relationship with Intel by getting too close with AMD.
"For the next few months and through the slowdown of the summer, it will be choppy for Intel," says Chaplinsky. "But that will change in the second half of the year when Intel turns up the heat on Pentium II and signals that it is going full steam ahead on it."
Finally, analysts say, the demand for microprocessors is big enough that there is room for both companies to do well. "The demand in the market for PThe demand in the market for Pentium Pro chips is so huge, this is really not going to affect the overall picture at Intel unless AMD gets a 30% to 40% market share, which we don't believe will happen," says Alan Lowenstein, a co-portfolio manager of the John Hancock Global Technology fund. "AMD's goal is to have a 10% to 20% market share by the end of 1998."
The demand for these kinds of chips will continue to grow in part because of the transition of cell phones to digital technology, the popularity of computer games that require faster processing, and the growth in use of the Net, where applications require more powerful computers, says Lowenstein. "We think that Intel and AMD can both do extremely well in this kind of environment."
Regards,
Brian Malloy |
