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Technology Stocks : Intel Corporation (INTC)

INTC 36.20

+0.1%

Dec 26 9:30 AM EST

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To: VICTORIA GATE, MD who wrote (61178)	7/26/1998 5:47:00 PM
From: Jacob Snyder	Read Replies (1) of 186894

VG: thanks for the article: 1. "inventory is foisted on another player in the chain." At the moment, there is overcapacity in almost all the components that go into the box. That gives the boxmakers the power to force component makers to take the risk of holding rapidly depreciating inventory. Someone has to hold inventory, because you can't wait to manufacture the chip or disc drive until after the customer places an order. Intel or Seagate can't adopt Dell's methods. When the cycle turns, and capacity shortages appear, boxmakers are going to be in a very weak position. 2. Everyone who stands between the original maker (of any product or service) and the final consumer, is standing on quicksand. Some will survive, but it's impossible to tell who. The survivors are going to have to evolve quickly. Margins for all middlemen are getting squeezed. Currently, because of the Asian meltdown, manufacturers are seeing their profits squeezed (compared to service/software/retailers). I think this is presenting an opportunity to buy the best manufacturers; in the long run the non-commodity component-makers will do better.

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