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Technology Stocks : Intel Corporation (INTC)
INTC 34.32-1.2%Nov 18 3:59 PM EST
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To: Jules B. Garfunkel who wrote (56643)6/2/1998 1:28:00 PM
From: Jeff Fox  Read Replies (2) of 186894
 
Jules, re: Merced schedule change

If I may respond to your post; your reasoning is valid, but is not in character for Intel. Nor is it the right timing in the life of Merced for changes based on these kinds of "external" arguments.

From your post:
with maybe the attractiveness of prolonging the 32 bit word architecture

This is a strategy appropriate when the market is not yet ready to absorb the new device. Intel is capable of such a move, but it would happen only after the first product version has already sampled. Such a strategy is a ramping decision - not a development decision.

From your post:
why not cut near term capital spending, and delay Merced

Simply Merced is not driving capital spending. The .18 micron fabs will produce both IA-32 and IA-64 processors. This is true for all other major capital items such as testing and packaging. Captial spending is driven by product volume and volume in this time frame is dominated by IA-32 processors. The development projects march to there own drummer.

As for Merced (the original Merced). You can bet that the development spending has been long since committed. Funding wise the decisions are over and set in stone (except for overruns, etc). Any R & D cuts now would be applied to subsequent projects. As an example Intel plans many derivative products and follow-on flavors. Perhaps Intel may cancel some of these programs in order to trim expenses.

From your post:
In addition, the delay in Merced will allow time for both MSFT and Intel to resolve their difficulties with the FTC

This may be a benefit, but I seriously doubt it has anything to do with Merced's schedule. Intel is a very pro-active company. It is out of character to expect management to throttle developments on the "hope" of better times ahead. No, Intel is fanatic about making its own better times. I expect Intel to manage the FTC issues such as to not inhibit Merced deployment - not the other way around.

Jeff
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