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Technology Stocks : Intel Corporation (INTC)
INTC 37.90-1.4%11:08 AM EST
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To: ild who wrote (153433)1/2/2002 8:41:24 AM
From: GVTucker  Read Replies (2) of 186894
 
ild, RE: What would make "the tech industry collapse" in your book?

In a Bass Ale-fueled brainstorm during one of the numerous boring bowl moments yesterday, we talked about that very subject.

My idea was that tech might be its own worst enemy. Some unknown entrepreneur invents a fab in a box. You buy the raw materials, put 'em in a machine, and out pops a chip. You can flash the chip with whatever information you need for whatever machine that chips needs to run by downloading information from the manufacturer. Microprocessors truly become commodities (instead of today, when only misguided bears think they're commodities). The 50% margins of today collapse. And, just as oil and gas continues to be a huge part of our economy today, semiconductors play a huge part in this imaginary economy. It just isn't valued nearly as high,
with gross margins at 10% instead of 50%.

On the other side of the coin, industry begins to realize that open source is a valid industry model. The Internet fuels software development from all corners similar to the development of Linux today. No one in the software industry can make a nickel, but the companies that use that software become amazingly efficient because their IT cost declines precipitously.
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