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Technology Stocks : Intel Corporation (INTC)
INTC 40.08-3.2%1:31 PM EST
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To: Paul Engel who wrote (131444)4/1/2001 2:54:37 PM
From: Dan3  Read Replies (1) of 186894
 
Re: that will be great for Intel - and bad for AMD and Rambus.

To a degree, I agree. OTOH, did you see that Sears is running an ad for a 900MHZ Duron from Compaq today? And CompUSA features a PIII 1GHZ machine as "exclusively available at CompUSA". It's easy to forget that 1GHZ is still a big deal for Intel.

PIII/Celeron is getting squeezed pretty tightly these days. How many .18 P4's do you think Intel can produce this year? And the sheer volume issue has been rewritten with the entry of VIA's 700MHZ chip. With VIA forcing Intel to slash Celeron prices, Duron limiting opportunities for PIII, and Athlon in a horse race with P4, the days of easy money for Intel are fading away. VIA and AMD are used to squeezing profits from (relatively) low gross margin parts, Intel has no recent experience to help them survive in such an environment - and Intel is still carrying baggage from the grand old "we're taking over the internet" days that sucks $1.5 Billion from the bottom line each quarter. Intel first has to break even before it can start tallying up profits and feeding that rathole of past mistakes could account for as much as $50 in additional costs that must be absorbed by each processor produced this year.

AMD could produce more than 10 million CPUs in Q4, VIA could produce another 5 to 10 million. That could leave as few as 20 to 30 million sockets available for Intel, and those at ASPs under a lot of pressure.

So I'd say Intel needs all the good news it can get.

Dan
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