Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 242.41

+5.0%

Nov 25 3:59 PM EST

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To: Katherine Derbyshire who wrote (24437)	9/19/1998 11:58:00 PM
From: Clarksterh	Read Replies (1) of 70976

Katherine - Ultracheap personal computers deliver lower margins to the chip companies, therefore they have less money to build fabs with. It depends on the reason that the computers are ultra cheap. If it is because there is excess capacity and the attendent cut-throat competition, then I agree. But if it is because consumers do not any longer need the extra power, then the price of computers can follow Moore's Law down without any loss in margins (assuming that the number of units sold increases substantially as the price drops). Right now I suspect that the drop in computer prices is a result of a combination of the two causes. Clark

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