Tony,
I was busy all day and missed this article that came out today re Intel cutting capex spending next year. Just yesterday an Intel spokesperson said the rumor was untrue. First Barrett, now this spokesperson.....if this is FD at work, I am getting worried.
In the meantime I bought some Intel for my 401 today. Like John F. says, should drop ten pts tomorrow. ;~))
ted
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Intel to Cut 2001 Spending by Up to 38%, Analyst Says
Santa Clara, California, Dec. 13 (Bloomberg) -- Intel Corp. will cut its capital spending by as much as 38 percent next year as weak personal-computer demand forces the No. 1 chipmaker to delay plans for new plants, an analyst said.
Intel may reduce spending to $4 billion in 2001 from the $6.5 billion the company has said it will invest this year, said Prudential Securities Inc. analyst Shekhar Pramanick, who covers the companies that build Intel's manufacturing tools.
Slack PC demand has prompted Intel, rival Advanced Micro Devices Inc. and other chipmakers to lower their sales forecasts for this quarter and raised concern about next year. That has investors in chip-equipment makers such as Applied Materials Inc. worried that customers will delay or scale back plans to increase capacity.
``Intel is pushing out spending,'' Pramanick said. ``Intel announced the Ireland push-out, and we also think the (higher) capital spending this year means (next year) will be in the $4 billion to $5 billion range.''
The Santa Clara, California-based company today said it will put off starting production at an Ireland plant until the second half of 2002, instead of the second half of 2001 as it expected. Intel decided to make chips on larger, 300-millimeter wafers instead of the standard 200mm ones at that plant, spokesman Chuck Mulloy said.
``We saw the opportunity to put a second 300mm (factory) on our roadmap,'' he said. ``We have a number of construction projects under way. This was a minor adjustment.''
Chip-Equipment Shares Fall
The shares of chip-equipment makers, the main recipients of Intel's capital-spending dollars, fell. Applied, the biggest chip- tool company, slipped $2.81 to $42.69. Lam Research Corp. lost $1.50 to $16.56, and Novellus Systems Inc. dropped $1.13 to $30.50.
Intel shares fell $1 to $35.50. They've lost 14 percent of their value this year.
Pramanick, an engineer by training, joined Prudential Securities in May from Wit SoundView and previously spent six years at AMD developing process technologies for building processors and flash-memory chips. He holds 15 U.S. patents, with more pending.
He cited ``proprietary checks at Intel'' and the company's delays in adding and expanding plants for his estimate.
Two other analysts -- Prudential's Hans Mosesmann and Salomon Smith Barney Inc.'s Glen Yeung -- said in notes to clients that Intel is likely to place equipment orders on hold.
Intel's Mulloy declined to comment on the analyst reports.
Expected to be the industry's biggest spender this year, Intel now has several sites under construction. Last week, it boosted its 2000 capital spending target from $6 billion.
The company is finishing a development plant in Oregon, overhauling a location in Massachusetts, starting a $2 billion plant in Arizona in the middle of next year and plans a flash- memory factory in Colorado for the first quarter.
Dec/13/2000 16:53 ET
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