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Technology Stocks : Intel Corporation (INTC)
INTC 50.59+4.9%Feb 6 9:30 AM EST

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To: Elmer who wrote (30651)8/29/1997 2:39:00 PM
From: Petz   of 186894
 
Elmer, RE:<<Economies of scale apply here {assembly &test} every bit as much as at a fab.>>

But there aren't any economies of scale if you need several locations for your assembly and test. If you have N fabs, you need N times as many assembly/test machines and N times the capital.

R&D, as pointed out by Yousef, is the main area where being big helps. However, Intel is using their R&D funds to diversify and shoot many cannons all over the place. Some of these shots will miss.

Have you ever heard how steel mini mills are eating USX's and big steel producer's lunch.

Petz
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