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Technology Stocks : Intel Corporation (INTC)
INTC 48.72+3.0%3:59 PM EST

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To: Mohan Marette who wrote (37724)10/27/1997 8:56:00 AM
From: mauser96  Read Replies (1) of 186894
 
Assuming that the reason for the price drop is better yield than expected as Intel states, it is good news. It costs almost as much to make a defective chip as a good one, so higher yield allows the same profit at lower prices. Lower prices stimulate demand, which means more chips sold. More chips sold mean more economies of scale, and more pressure on AMD and others which have to lower prices also (they are already losing money at present prices and are unable to increase capacity because of lack of fab space and defective manufacturing abilities). It indicates that Intel's superior manufacturing skills are intact.
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