Paul, when this article was written a year ago, Intel closed at almost exactly today's price. Which makes a lot of sense considering that the article is just as applicable now (except for the then-unforeseen factor of the Asian flu).
sumnet.com
Electronic News: June 30, 1997 Issue
"Low-End PC Pinch May Be At Core Of 2Q Semi Woes:"
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excerp: "In semiconductors, we think the success stories will be company-specific. Those who can continually stimulate demand for new products will do better. The Intels of the world, who simply can't pick up any new share, will have it very difficult. In drives, a company like Seagate has a market share equivalent to Intel's in MPUs. When you talk about 80-90 percent share, there aren't too many ways to go. If you look at MPUs, you hear Advanced Micro Devices talk of 4 million units this year, going to 20 million next year. The entire PC business is only expected to grow by 16-17 million units next year. And AMD has a product that will grow to virtually an equivalent number of units, so where is Intel's $4.5 billion capital spending going next year? The numbers don't work. You can make the case that AMD is switching from the K5 to the K6 and that might impact the numbers, but in terms of relevant market for mainstream Intel MPUs, all of a sudden there is a competitor who intends to add as many unit shipments this year as the entire market. The only thing Intel can hope for is that there are a lot of servers sold, needing a lot of MPUs."
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The article is rather long but interesting reading.
Craig |
