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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: GP Kavanaugh who wrote (83151)	6/9/1999 3:46:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

GP - Thanks for the ALEX Brown/Erika Klauer analysis. Paul

To: GP Kavanaugh who wrote (83151)	6/9/1999 7:52:00 PM
From: Maverick	Respond to of 186894

INTC's awesome 30% cost savings By Motley Fool ALEXANDRIA, VA (June 9, 1999) -- Few companies can lower the cost of producing a primary product by 30% in a single swoop, but Intel (Nasdaq: INTC) has been able to decrease its product cost nearly annually since 1985, and today it announced that its pending move to 300 millimeter semiconductor wafers should lower costs by 30% for each chip made. Intel will pass much of the savings onto consumers. Lately, it's good to be a consumer. 300mm wafers have more than double the surface amount of the currently-used 200mm wafer, and they improve productivity and allow the creation of more powerful chips at lower cost. Intel will start volume production with larger wafers (by the way, remember when Apple Jacks cereal was made larger?) using 0.13 micron technology (smaller micron technology also cuts costs) and copper, people, copper, in 2002. It should begin volume production with large wafers (but not copper) and 0.13 micron in 2001. Intel and chip equipment stocks rose on the news. Intel rose because it will save costs over time (even after spending mountains on equipment upgrades), and chip equipment companies rose because chip makers will spend mountains on equipment upgrades. The move to 300mm has been anticipated, but not enough so to be fully accounted into stock prices. (This industry shift, in fact, could finally give more life to contract-winning chip equipment makers in the coming years after what seems to have been a relative four-year lull.) Imagine if Coca-Cola (NYSE: KO) or Johnson & Johnson (NYSE: JNJ) suddenly announced future 30% savings on key products. How incredible is the ability to cut costs 30%? It is very incredible. With Intel, however, regular cost cutting has become such commonplace and is now so regularly assumed (it shouldn't be regarded as such, in my opinion), that it receives very little "awe power." Still, I'm comfortable being awed at Intel's unparalleled business (it has no industry peer), even if I'm alone with my slackjaw.