If anyone is looking for confirmation that Intel is more than a bit worried about retaining its dominance, this is it. Andy Grove in Taiwan is a bit like John the Baptist appearing at a convention of devils in hell. When I say Taiwanese manufacturers are price sensitive and pragmatic in their outlook on the slogan, "Intel inside," I am being polite.
Like any good businessman, Intel is reluctant to concede any product line that will make them good profits, but Intel's concept of a good profit differs vastly from that of other semiconductor companies. When things got tough in semiconductor memory, they switched horses and got out. Intel's subsequent championship of FLASH memory has been less than overwhelming. If their Celeron profit margins become too slender, they'll try to switch customers to higher margin microprocessors and stop making Celerons. It will be an intelligent business decision, but they don't have another horse to jump to with the promise of Ted Hoff's original microprocessor. Intel's future profits will come much harder, and that's part of why Andy Grove appeared in Taiwan trying to soft-soap the locals.
My own opinion is that a good-sized Pentium-type microprocessor market niche will exist in the sub-thousand dollar computer business, and that AMD, Cyrix, and IDTI will be able to fill it. If some of the better Japanese companies, such as Hitachi, Fujitsu, and NEC, decide to enter, things will get much tougher. The time to do that militates against them, and timing is everything.
A recent comment in this thread mentioned that Intel had numerous fabrication plants capable of doing .25 micron technology. They do, and I don't think IDTI will have an easy task to get Oregon up and running a quarter micron process. Moving from .35 micron to .25 sounds so easy, but it is a 28% reduction in line width, takes equipment with tighter tolerances, and perhaps added step and repeat photolithographic tools. IBM has that capability in production, so IDTI should be able to produce C6+ WinChips while it's making the internal conversion.
We'll see how badly the stock market falters today, but none of it will change the fact a great business opportunity exists in the sub-thousand dollar PC area, and that IDTI should be able to sell into it. Rob is probably right about a market pull-back, but I've expected one for three years and been consistently wrong. I hardly bother to guess anymore, and place little trust in technical analysis. It may work, but appears to be far more mumbo-jumbo than science to me. I'm open to be educated, if you can persuade someone with a closed mind. Trying to pick good stocks is about as far as I've come. |
