Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 242.41

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Nov 25 3:59 PM EST

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To: Proud_Infidel who wrote (2218)	8/9/2002 2:42:22 PM
From: Cary Salsberg	Read Replies (2) of 25522

I think it is appropriate under INTC's current situation to compare capex and depreciation to earnings. INTC is in transition: 1. Monopoly PC processor pricing has fallen to AMD competition; 2. AMD has indicated that they will move toward a fabless model. This is possible because foundries are able to keep up with INTC's technology (all can buy from AMAT, ASML, etc.); 3. INTC has partnered with MSFT, but they have very different objectives. INTC needs PC software innovation to create demand for more powerful chips. MSFT uses its PC software domination to strengthen its control of the PC and gain control of other platforms and venues. It has stifled PC software innovation. I agree that INTC will "re-evaluate its manufacturing strategy". These guys are too smart to "fight the last war". I hope the market will understand that lowered INTC capex is company specific and does not imply lower industry capex. "Outsourcing front-end services" is a first step toward a fabless model.

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