Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 220.28

-6.4%

Nov 20 3:59 PM EST

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To: akidron who wrote (18081)	3/23/1998 11:33:00 AM
From: Teri Skogerboe	Read Replies (1) of 70976

Aki, Re: INTC. A crosspost from the PRI thread, looks like Briefing.com's comments to me. Semiconductors: PRI Automation (PRIA) To: +Teri Skogerboe (362 ) From: +Steve Sohn Friday, Mar 20 1998 5:10PM EST Reply # of 364 Teri...to your comments: INTEL CORP. (INTC) 75 3/4 -1 9/16. Despite the ratings upgrades by Morgan Stanley for several semiconductor makers this morning, the technology sector as a whole is sucking wind today as late yesterday this leading chip maker announced plans to cut prices of its high-end microprocessor. While such an announcement should not have been too surprising, given that Intel typically cuts prices once a quarter and the earnings warning that INTC issued earlier this month, the fact that Intel is cutting prices of its Pentium II processor by 19% means that the PC demand slowdown is also affecting the high-end of the market. To be sure, price cuts to this higher-end chip group means that Intel will experience even more margin and earnings pressures. Already the company has said that margins were expected to decline by a few points from 59% in Q4. While Q1 is typically a weak quarter for the company, it seems that earnings will be depressed by more than the usual dip that occurs in this period. The fact that this leading chip maker is seeing PC makers manage their inventories that much more closely is forcing Intel to announce price cuts more frequently than in the past. Hence, price cuts will happen more often, meaning that margins and earnings will be less predictable and they will occur across the product spectrum. Intel has entered a more volatile pricing environment than was the case just six months ago.

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