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Technology Stocks : Intel Corporation (INTC)
INTC 35.53-1.1%Nov 14 3:59 PM EST
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To: lkj who wrote (69203)11/30/1998 2:11:00 AM
From: Mike Wong  Read Replies (2) of 186894
 
Your concern for Intel is unjustified.

1. It's a heck of a lot easier to build last year's chip to compete with Intel low end than to compete at the leading edge of technology.

2. AMD is unprofitable, and will continue to be unprofitable. Let's take a simple example: Assume there are 2 companies building a widget that have small variable costs relative to fixed costs. Company A sells 1000 widgets, and has a $1000 budget for fixed costs-- R&D, tooling and marketing. Company B sells 100 widgets, and has the same $1000 fixed costs. Company A's fixed costs are $1 per widget, whereas Company B's fixed costs are $10 per widget. Even if Company B is twice as efficient as Company A, its fixed cost is still $5 per widget.

Good luck!!!
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