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Technology Stocks : Intel Corporation (INTC)
INTC 35.53-1.1%Nov 14 3:59 PM EST
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To: Paul Engel who wrote (42537)12/17/1997 7:08:00 PM
From: Joe NYC  Read Replies (1) of 186894
 
Paul,

You must have dropped a "0". This year's market is about 80,000,000 CPUs and Intle has indicated the current run rate for 1998 should be 100,000,000 CPUs

I meant the growth of the number of CPU's sold will be only a little over 10M. I think 20M (25% growth) is a little too ambitious. But even under that scenario, I think we will have a glut of chips in '98.

Moreover, even Windows 95 allows mutiple applications to be run simultaneously/concurrently so the need for higher power CPUs to keep all these applications going "nearly" simultaneously will help drive users to more CPU power.

The question is how much more CPU power. How much more powerfull than 200 or 233 MHz Pentium MMX class chips (which starting January will be the bottom of the food chain).

Ask yourself how many 386 and 486 CPUs were sold this year.

I don't know what you mean. Why would anyone buy a 486 for $20 when you can get 166 MHz or 200 MHz Pentium class CPU dirt cheap ($70 to $100). I guess this is why I am becoming more and more pessimistic about the whole CPU market. Because of the glut of perfectly fine, high power CPUs are beginning to sell for under $100.

The incentive on the part of the users to pay 3 or 8 times as much for marginally better CPU is very low. It is even lower knowing that these high price 266 or 300 MHz chips will be $100 in 6 to 12 months.

This is buyers market, and unfortunatelly I am holding stock in sellers. (I guess you are too)

Joe
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