ANYONE CARE TO SPECULATE ON WHO WILL BENEFIT?. . . . .NEWS: Intel Plans Venture Fund For New Chips
NEW YORK (Reuters) - Intel Corp. (Nasdaq:INTC - news) is expected to announce Monday a new $300 million venture capital fund to foster companies that design key building blocks for the next generation of Intel microprocessors.
US Bancorp Piper Jaffray analyst Ashok Kumar said Sunday he expected Intel, the world's No. 1 computer chip maker, to contribute $100 million in seed capital to the new fund while the remaining $200 million would come from outside investors.
The $200 million will be supplied by a mix of Fortune 500 customers and technology suppliers like Hewlett-Packard Co. (NYSE:HWP - news), a key ally in the development of Intel's upcoming generation of microprocessors called IA-64, Kumar said.
Intel spokesman Tom Waldrop confirmed the Santa Clara, Calif.-company planned to make an announcement Monday related to its so-called ''64-bit'' microprocessor chips that was not directly related to the products themselves.
He declined to comment further ahead of the announcement.
Intel has long been an active venture financier of technology companies, with stakes in more than 200 firms and a venture portfolio worth $2.5 billion.
''What is unique about this fund is that while Intel will be the lead investor with about $100 million of capital, the residual $200 million plus will be provided by a mix of IT (information technology) providers and users -- Fortune 500 companies,'' Kumar said.
Intel's microprocessors form the brain of most personal computers. Upcoming Intel chips are being designed not just to control PCs but also to run larger, mainframe-class computers that can handle millions of customer transactions at once.
The new chips will revolutionize the cost of computers sold to large businesses by introducing Intel's high-volume economics on chips used to run this wider range of computers.
While dominant in the mass PC market, Intel holds only a small percent of this high-level business, where rivals Sun Microsystems Inc. (Nasdaq:SUNW - news), H-P, IBM Corp. and Compaq Computer Corp. (NYSE:CPQ - news) dominate with chips of their own.
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