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Technology Stocks : Intel Corporation (INTC)

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To: Jeff Fox who wrote (77343)	3/29/1999 3:31:00 PM
From: Tony Viola	Read Replies (1) of 186894

Jeff, Saturn V, re:"Customers very sensitive to reliability of a chip may demand that their chips have this Chip ID feature and that the manufacturer send them parts from the "Prime Yield" areas. [ This may give the word prime cut a new meaning.] Such customers would obviously pay a premium for their Prime Cut." In a word - no - not a chance... Yes a chance. IBM does it. They put their chips that are intended for the highest reliability products, say System 390, into three buckets, based on reliability. How do they know what the reliability is going to be? They base it on yield, and they charge more money for the highest yield/reliability bucketed ones. Now, IBM semiconductors' customers for S390 CPUs and chipsets are their own large systems division and Hitachi, a competitor. Who gets the expensive ones/cheap ones? I don't know. IBM charges varying amounts for other types of chips besides S390, based on yield/reliability, but I don't know what the types are. Tony

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