Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 37.91

-1.4%

Nov 11 3:59 PM EST

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To: Wolff who wrote (95889)	1/13/2000 11:41:00 AM
From: Robert Douglas	Read Replies (1) of 186894

Wolff, Hear me now, believe me later, the CPU will not always be a huge margin part, the Harddrive is a highly complex high tech part, the sells for at the barest wimpy margins. Not so different than many semiconductor firms, Intel is the exception. JPN put you head in the sand and think that Intel margins will hold up. If the microprocessor ever becomes a commodity part it will certainly earn commodity type margins. I don't think that day is yet upon us. Your comparison to hard drives isn't perfect. Disk drives makers have been in trouble for a variety of reasons but chiefly because increases in areal densities reduced head and platter count dramatically the last few years leading to falling ASPs and most importantly excess capacity. As each maker fought to maintain market share in an environment of excess capacity a brutal price war was fought. At present Intel is selling as many chips as they can make. Unless you are predicting a severe drop in demand that produces excess capacity, I don't think your scenario will come to pass anytime soon.

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