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Technology Stocks : Intel Corporation (INTC)
INTC 34.50+2.6%Nov 21 9:30 AM EST
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To: Paul Engel who wrote (71353)1/13/1999 1:57:00 PM
From: Chris Carlson  Read Replies (2) of 186894
 
"Intel's Otellni stated that the reason for this was a SURGING DEMAND for Pentium II processors to which Intel allocated manufacturing resources away from Celeron manufacturing."

Paul and all,

What is the story with manufacturing capacity in relation to this tidbit? Does Intel have latent capacity that it can bring on-line? Or is it simply a matter of building the fabs it has planned and rigging them for the most profitable market segments?

I guess my question(s) ties into how Intel will deal with the market share question on the low-end. I mean, if they continue to be sold out, certainly it makes sense from a profit-margin perspective to produce more of the most expensive chips, and leave the bottom to the bottom feeders. This then could sacrifice Intel's potential dominant market position in these niches.

An interesting quandary, if you ask me. Robbing poor Peter to pay rich Paul (not you specifically). A good 'problem' to have, no doubt, but perhaps there is a point at which Intel finds it beneficial to sacrifice margins for market share.

I guess I'm not really saying anything new (and I'm rambling), but I'm wondering how the specifics of yesterdays release and Intel's stated future plans deal with this (quickly becoming cliche) issue.

Thanks for any input.

Chris

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