John, re Intel's PE, that subject has come up here from time to time. Reasons that have been given for their relatively low PE are:
1. Their huge capital expenditures, mostly in plant and equipment, that it takes to continue to improve in processing and manufacturing technology. Intel had forecast $5.3 billion for 1998, and lowered it by about 1/2 billion when things started to slow down, sub $1000 PC showed up, etc.
2. The cyclical nature of the semiconductor industry.
I think your comment about "the franchise" is appropriate. I don't think many of the "analysts" understand that Intel is the franchise player, the Jordan, or Griffey Jr., on the court or field with just a bunch of double A pretenders for competition. I also don't think they understand what a complex product the microprocessor is. They see a several hundred pin chip you can put in your shirt pocket, or a PII slot 1 package about the size of a pop tart, and think, how complex can that thing be? Anyone with a few engineers could copy it, right? Wrong. Even if they could, what yields are they going to get? Oh, I forgot to mention in my previous post, even if an AMD were able to copy Merced, function for function, Megahertz for Megahertz, all companies that are going to use Merced would run, not walk away from anyone but Intel. That's because Merced is intended for enterprise server applications, which have a very high reliability requirement. Intel is the only x86 vendor that has demonstrated consistently high yields, and, therefore, high reliability.
Off the soapbox, apologize for getting carried away.
Tony
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