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Technology Stocks : Texas Instruments - Good buy now or should we wait?
TXN 157.04-0.2%3:59 PM EST

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To: Skeeter Bug who wrote (2071)11/16/1997 11:04:00 AM
From: Nhiem Nguyen  Read Replies (2) of 6180
 
< if ti can do it then anybody can do it. if that is the only chip sector with earnings growth then EVERYONE AND THEIR MOTHER will start making them or competing products...>

skeet,
The definition of a commodity is low price and low margin with high volume.

Is EVERYONE & THEIR MOTHER stupid enough to jump into a market that has those characteristics????? Why mobilizing your work force to jump into a market that has low potential profit? And competing with TXN head-on?

There is a thing called competitive advantage. TXN knows how to utilize economy of scale because they own and can controll high volume manufacturing (including FABs). That is NOT something that EVERYONE and THEIR MOTHER can do. May be a handful, but not EVERYONE.

It's a huge expense to build those FABs and test facilities, for starters...

By the way, how can a high growth market be of commodity nature. Commodity occurs only in markets that are MATUREd, and perhaps declining.
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