Formerly About Applied Materials Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials

AMAT 223.95

+1.7%

Nov 21 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Steve Byers who wrote (18016)	3/21/1998 1:26:00 AM
From: akidron	Read Replies (6) of 70976

steve.... I wanted to follow up a post I made this morning... before I leave for the uk tommorrow... (was supposed to go today but one of my girls got sick) ... it dealt with the comoditization of the cpu market, following on from the dram market, and the effect it will have on amat... I am by the way by no means certain of all the issues involved but I have been following the discussion on the intc thread and wanted to make a stab at coherence with the idea that others might add or subtract... civily. the breath of INTC's margins has powered the techs for a long time... amat has been a prime benificary... the margins have survived numerous attacks because in the past intel has been able to grow revenues while cutting prices to ward off competition... this was true of the 286, 386, 486 and every cpu intel made until recently... the net result was that the competition was always one technology behind recieving commodity sized prices for commodity chips... with the advent of the $1000 pc... intc's position seems to have changed... I really don't want to argue the technical merits of the various cpu's that have found there way into low price cpu's - because there are many of u that are better placed to do this - but the K6 has now made it's way into nokia phones and will do so for many years to come, and is looking like a pretty flexible platform. And National's plans for cyrex seem very smart, in that they are integrating many of the mmx type functions of new pc's onto the cpu intself and providing value added for little extra cost.... it seems to me that the problem for intc is that this sub $1000 segment of the market (which is not imo going away... in fact if anything it is become a $750 segment) is one that can only be sustained by the comoditization of cpu's... a trend that intc seems to aknowledge with its late and perhaps redundant (given the falling prices of P II's) de-engineered Celeron cpu... and I guess my follow on question is that once the low end of the market is commoditized in this way, why wouldn't competition force this to happen at the lower end of the business market and then filter up into higer prices pc's and even work stations... (not all pc's by any means - there will also be some people who do require the fastest and the the most elegant achitecture - but enough to affect the business) and won't this proccess be speeded up by msft's and ibm's divergent efforts for cross-platform compatibility... indeed ibm seems to be betting the farm on lessening the importance of the particular cpu.... if the above is the case (and I suspect it might be, but am interested in thread views) intc will never have the margins it once did... I am not saying it is going away... please don't go that way on me.... and semi-equips like amat will also find that their margins come under pressure....

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next