<<I thought your true intent was to come here and tell us that the potential for Intel appears dull>>
I'm trying to figure out the potential for Intel myself these days. When they brought out the Pentium, the world needed a faster, more powerful microprocessor, especially to run Windows95 applications. They had no competition at that time and the ASP of the Pentiums was high. They still have the Pentium, now running at 200+ MHz, which is more than sufficient for most users, but it's now one of their lower end products. The demand and need for high-end Pentium II processors just isn't there yet. Hence, I see downward pressure on ASP, and hence on earnings growth.
In the past, Intel had been able to reduce cost by moving to larger wafer sizes and smaller design rules. Although now at 0.25 micron, the cost to go to smaller shrinks will be enormous, and require substantial expensive advances in process technology. In addition, the move to larger wafer sizes, e.g. 12 in., will require expensive, very advanced semiconductor equipment, and may result in low yielding processes. Intel will pay a heavy burden in making this transition.
Thus, I see difficult times for Intel, regarding market cap and earnings growth, in the near future -- although Intel is in great position a few years out. JMO
Peter |
