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Politics : Formerly About Applied Materials

AMAT 325.54

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11:46 AM EST

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To: Proud_Infidel who wrote (48021)	6/16/2001 5:59:41 PM
From: Jacob Snyder	Read Replies (1) of 70976

You're right, the barriers to entry are high, and there are only two players. And two players usually means an oligopoly (with de-facto monopoly prices), not a commodity market. But, watching what's actually happened in the last 2 years, it looks like 2 players is enough to have price competition. Yes, chip prices always go down. But the price cuts Intel has done, have been bigger and earlier than in other cycles (IMO, and I could be wrong easily). I see steadily eroding margins in MPUs. INTC is the best chip manufacturer (any sector), has a solid balance sheet, world-class management, and is making strenuous efforts to diversify into higher-growth areas. They will be a survivor, and they will be a good investment. I don't think cellphones are going to replace PCs as the main computing and networking device. My preference for other chip companies is not that strong.

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