aki - the breath of INTC's margins has powered the techs for a long time
NOI but what does this mean? Certainly PC sales have powered the semi industry, but INTC's margins? If PC sales had remained the same, and INTC had had lower margins do you think that the semi industry wouldn't have grown as fast? For example, DRAM has very low margins normally, and yet they have grown as fast as Intel.
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....
Maybe they will maintain margins, maybe not. Remember when the same thing was said when AMD and Cyrix came out with the 486, and the 486 started appearing in all sorts of new devices (like hand-helds)? I vacillate on this issue, so I am not making a guess here, but only noting that it is very hard to predict.
I think a bigger issue is market saturation. A very high percentage of US households now have a computer. In order to keep up the growth rate they will have to change strategies (sell multiple computers to one home, or wait till Europe and Asia become big enough to take up the slack, ...) and I think there is a good chance that this transition will cause a temporary leveling in unit sales at some time in the near future (in the next year).
Finally, as for AMAT. In the long term (2 or 3 years) AMAT does not live or die based on the PC market. Right now a leveling in PC sales would cause some hurt for AMAT, since PCs are the biggest individual segment, but other segments would soon take over. Again, it the transitions that would hurt.
Clark |
