Paul- re:"At a time of industry shortage, the added flash capacity will be quickly absorbed by the market, particularly cell-phone makers, which will try to fulfill demand for 500 million handsets in 2000, according to Intel estimates. Demand from applications like cell phones and MP3 audio players will drive flash shipments from 11.4 billion Mbits this year to 34.1 billion Mbits in 2000, according to Semico, which expects the market to generate about $6.2 billion in revenue next year."
Looks like like this has the potential to become a significant growth business for Intel.
Questions:
1) What percentage of current Intel profits come from flash memory?
2) What is the gross margin for Intel's current flash business?
3) Working through the numbers stated in the article ( "decrease the cost-per-Mbit of flash memory by about 30% annually","90% of the same manufacturing equipment and 80% of the same “recipe.”,"quadruple its 1999 flash output","2.5 times the number of flash chips currently yielded on an 8-in. wafer) how will this translate into gross margin/profit improvement?
4)Can we assume that Intel will be able to charge a higher price for their superior product? If so, how much more?
I've been trying to decide how I can get in on the on the cell phone rage...missed the boat with your early call on QCOM. Now it is way too rich for my blood, P/E=300+. After reading your post it occurred to me that Intel shareholders will participate, albeit in an indirect way, in the handset, cell phone, digital assistant boom. Just curious as to how much? Other potential areas, Strong Arm Etc, DSP, etc..?
Your comments are greatly appreciated. |
