IDTI - an IC Play on Growth Markets Message Board

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Technology Stocks : IDTI - an IC Play on Growth Markets

IDTI 48.99

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Mar 29 5:00 PM EST

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To: Rob S. who wrote (9083)	7/6/1998 1:42:00 PM
From: Xianming Liu	Read Replies (2) of 11555

Rob: <<... Average wholesale ASPs on WC 2s will be bellow $90 and quite possibly bellow $75 by the time IDT is in anything close to volume production >> IDTI would be really lucky if it can achieve ASPs of $70. Here are some current prices on X86 CPUs that I found from pricewatch.com (excluding shipping & handling fees): Pentium-233 Mhz MMX $105; Celeron-266 MHz $94; Celeron-300 MHz $153; K6-233 MHz $63; K6-266 MHz $93; K6-300 MHz $125; K6-266 3D-NOW $113; and K6-300 3D-Now $163. According to IDTI's near term plan, the volume production of Winchip II will not begin until late August or early September. Initial speed of the WC 2 will be 240 MHz and move to 266 MHz subsequently. The 300 MHz version will not be out until December. Under the best circumstances, let's assume that IDT executes smoothly this time and that 240 MHz WC II comes out in large numbers in early September. By this time, however, INTEL will begin another round of price cut. AMD/IDTI/NSM will have to cut corresponding to match the price cut. Using the rate of the price decline of the past 2 quarters, it seems reasonable to assume that the price of K6-266 will be close to the price of K6-233 of today, i.e. around $65. Considering that initial WC-II will be only 240 MHz, it seems to me the price of WC-II will likely be below $65 by September. The above ASP for WC-II is probably optimistic estimation. It assumes that over-supply of X86 CPU will not become more seriously and that IDTI executes flawlessly. The fact that INTC has halted a few of its fab plants for several days probably suggests that the oversupply situation will get worse in the 2nd part of the year. If IDTI misses its schedule by a month, well, the ASPs of WC-II will probably be like the ASP of WC now.

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