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Technology Stocks : SMSC Standard Microsystems
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To: thom who wrote (153)5/27/1997 9:07:00 PM
From: Robert Salasidis   of 335
 
How about a comment I heard either on CNBC (or PBS NBR) stating that 3Com was now less worried about Intel making gains on the network market. This would also benefit SMSC.

There is a chance that Intel will use the same strategy in networking as it did in motherboards. In order to force Taiwan manufacturers to produce Pentium (and not 486) motherboards, Intel began producing increasing numbers of Pentium motherboards. When Intel got tghe desired effect it deemphasized its motherboard production - (the low prices where affecting gross margins - which pressured the stock for a short period).

Similarly, Intel jolted the 100 Mbs ethernet market with very aggressive prices which all major vendors have since matched. Although I have not seen official figures as to the sales of 100 MBs hardware. it is likely that they have improved. Once 100 MBs takes over older 10 Mbs hardware Intel may elect to get out of the low margin business that makes up most of SMSC networking revenue and a large part of COMS sales.
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