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Politics : Formerly About Advanced Micro Devices
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To: Steve Porter who wrote (77741)10/29/1999 2:04:00 PM
From: Paul Engel  Read Replies (4) of 1572209
 
Steve - Re: "I think Intel would be quite happy to sell one high-end unit per household and leave the 'desktop' and 'appliance' chip market to others.. thoughts and comments?"

Intel views - and properly so - the CPU business as an athletic contest - there is one and only one winner.

Intel wants to be that winner.

Near Total Dominance in the past has helped Intel invest in state-of-the-art manufacturing fabs - and they see their future ability to do the same tied to maintaining that dominance.

A market fragmented by 2 or more suppliers, each holding a small fraction of the overall market, results in stagnation - due to lack of real profits for future investments.

Intel learned that lesson in DRAMs and SRAMs, both of which they essentially invented in the late 60's and early 70's.

As more competitors came in, Intel's profits didn't allow them to make huge investments (Intel at that time was much, much smaller than it is today) to protect those markets - and they eventually lost their competitive position - along with profits - and had to withdraw from those markets.

And even the survivors of those markets (SRAM/DRAM) have divided up the market so that essentially none of them can make a profit over a sustained period of time.

With that experience behind them - but still "fresh" in their "memory" - Intel will protect its market share in every segment of the CPU market.

Paul

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