Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 48.76

-1.0%

10:26 AM EST

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To: gnuman who wrote (36950)	10/20/1997 10:40:00 PM
From: Fred Fahmy	of 186894

Gene, <Fred Fahmy, Based on this PR from Micron, bud.stocksmart.com:8810/ss-news/CX636912.html I'm starting to believe your predictions on PII penetration. This is a hell of a deal! Any predictions on what this means to Intel forward looking margins? > The current drop on PII's being offered by many of the box makers shouldn't affect Intel this quarter since the box makers are dropping prices without any new price cuts from Intel. In otherwords, they are either getting better prices on other components or are having their own margins squeezed. Looking back over the last couple yeasrs, Intel's guidance on future margins has been right on the botton. I have no reasons to believe that they have all of a sudden lost the ability to predict margins. For Q4, they have said margins will be flat to slightly up. Keep in mind that they have been saying for just about two years now that they do see a return to margins in the 50% range. I think we will see some of this in 1998 especially as they expand into other businesses. Overall, I think that the pressures on CPU margins in 1998 will be largely mitigated by robust sales at the high end including mobile CPU's and server (which will be in the 400+Mhz range) CPU's. Also, costs should continue to come as the new processes mature and througput increases. The coming year will be challenging for Intel but I think they can manage the challenges and prosper. BTW, IMO a challenging year for Intel equates to a desperate year for AMD and CYRX/NSM. FF

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