pru thinks that amd would loose 10% market share which I can not reconcile with amd;s statement of record shipment
08:55am EDT 30-Aug-01 Prudential Securities (H.MOSESMANN 650-320-1631) INTC AMD
INTC: HIGHLIGHTS FROM TAIWAN AND IDF
INTC: HIGHLIGHTS FROM TAIWAN AND IDF
PRUDENTIAL SECURITIES August 30, 2001
Intel Corp. (INTC- $28.51) -- NASD
----- ANALYST(S) -------------------- -------- OPINION -------
Hans Mosesmann 650.320.1631 Current: Buy/Select
Traci Tsuchiguchi 650.320.1639 Risk: Moderate
Target: $40.00
Industry: Market Outperform
The senior analyst(s) does not have a material position in any of the stocks
mentioned in this report.
----- EARNINGS ------------------------------------------------------------
FY Rev EPS P/E 1Q 2Q 3Q 4Q
Actual 12/00 $33,750.0A $1.65A 17.3X $0.35A $0.50A $0.41A $0.38A
Current 12/01 $26,711.0E $0.50E 57.0X $0.16A $0.12A $0.09E $0.13E
Current 12/02 $30,250.0E $0.65E 43.9X $0.13E $0.15E $0.17E $0.20E
----- FUNDAMENTAL --------------------------------------------------------
Avg. Volume: 44,900,000 Div/Yield:0.08/0.28% EPS Growth: 20.00%
Market Cap: $191,815 m 52w Range:75.70-22.30 P/E / Growth: 2.9x
Shares: 6,728.00 m
----- BUSINESS -----------------------------------------------------------
Intel Corp (INTC), headquartered in Santa Clara, CA, is the leading global
supplier of x86 microprocessors (MPUs), with roughly an 85% market share. In
addition to its x86 MPUs, INTC's product line targets other high-growth areas
such as communications, networking, PC motherboards and chipsets, embedded
processors, and Flash memories.
----- HIGHLIGHTS ----------------------------------------------------------
* After four days of visiting with many companies throughout the entire
technology food chain in Taiwan, it does appear that Q3 overall unit x86
processor growth of mid single digits is in the cards.
* Aggressive late August P4 price cuts and the "delayed" availability of the
new P4 SDRAM-enabled core logic chipset 845 created, in our opinion, an August
that may have seen higher MB growth from PIII whitebox (cloners) players than
from top tier MB suppliers for PC OEMs.
* Based on current order rates, MB players including both top tier and
whitebox will likely see a 10%-15% sequential uptick in shipments for September,
which would easily translate into mid-single digit overall x86 processor growth
for Q3 vs. Q2.
* Our assumption of 10% Intel processor growth in Q3 is based on market share
gains at the expense of AMD (AMD--$14.20; Hold), which will likely have trouble
keeping up with Intel's P4 momentum.
----- DISCUSSION ----------------------------------------------------------
The Case For Unit Processor Growth In Q3 - Update From Taiwan, PIII To P4
Transition. After four days of visiting with many companies throughout the
entire technology food chain in Taiwan, it does appear that Q3 overall unit x86
processor growth of mid single digits is in the cards. After Intel signaled to
the industry a faster than expected P4 ramp at the end of Q2, July and August
have been characterized by motherboard (MB) players that have been eager to
reposition their desktop product lines to be heavily P4-centric while at the
same time eliminate any residual PIII processors/MBs (and PIII core logic
chipsets) that may have been in the channel.
The combination of aggressive late August P4 price cuts and the "delayed"
availability of the new P4 SDRAM-enabled core logic chipset 845 (likely a clever
maneuver) created, in our opinion, an August that may have seen higher MB
growth from PIII whitebox (cloners) players than from top tier MB suppliers for
PC OEMs. Why would a PC OEM risk PIII inventory obsolescence with such a
massive P4 transition at end of the month? This left an important part of the
August PIII market (whatever residual there could have been) to the whitebox MB
players which have good presence in emerging markets such as China, Latin
America and Eastern Europe and where 1) demand has been holding up relatively
well and 2) where the absolute lowest cost points rule.
Based on current order rates, MB players including both top tier and whitebox
will likely see a 10%-15% sequential uptick in shipments for September, which
would easily translate into mid-single digit overall x86 processor growth for Q3
vs. Q2. Our assumption of 10% Intel processor growth in Q3 is based on market
share gains at the expense of AMD which will likely have trouble keeping up with
Intel's P4 momentum. Our checks in Taiwan this week suggest this dynamic may
indeed be developing.
Update from Intel Developer Forum (IDF). Yesterday's keynote presentation at
IDF focused on the client side, with emphasis on Intel's desktop, mobile, and
handheld platforms. For desktops, emphasis was placed on serial interconnects
(3G I/O, USB 2.0, and serial ATA) to improve system performance. On the mobile
side, Intel's roadmap seems robust with mobile P4s expected to go into a volume
ramp in 1H02 and scaling to 2 GHz by the end of 2002. In fact, a 2 GHz mobile
P4 was demonstrated during the keynote. The company indicated that mobile P4
performance has exceeded expectations and that 0.13 micron process technology is
ramping smoothly. In handhelds, Intel continues with its building block
strategy, promoting its XScale processor and PCA. |
