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

To: EepOpp who wrote (90613)	10/19/1999 3:37:00 PM
From: Bob Kim	Respond to of 186894

looks like a lot of people follow that ML Tech list. If that's true then they've been losing money for the most part.

To: EepOpp who wrote (90613)	10/19/1999 3:37:00 PM
From: Robert Douglas	Respond to of 186894

Here is the comment from ML on Intel this morning. This is from their semiconductor analyst not the folks who make the "Top 10 list." In my opinion, the ML news isn't what's driving the price today. It's just good old fashioned price momentum. You love it when it's going your way and hate it when it's not. <<<Dell reducing DRAM content ... Dell's comments yesterday regarding its intention to reduce the amount of DRAM it offers with some of its products raise questions for both Micron Technology (MU, C-1-2-9, $681/4) and Intel (INTC, B-1-1-7, $69 3/8). For Micron, we believe the news is positive, underscoring the under supply argument that has supported our buy case for the stock. For Intel, the implication appears less clear -should Dell's possible weakness in unit demand be duplicated elsewhere in the industry Intel would suffer. For Micron, the implication is positive - undersupply is likely to continue For Micron, the fact that tight availability and high spot pricing has caused its customers to scale back consumption is not surprising, and should not be interpreted as negative. There has never been a demand-related downturn in the DRAM industry - pricing trends over time are driven almost entirely by supply, which is far more volatile than the modest shifts in consumption that price elasticity of demand can bring about. Today's pricing is an example of the kind of operating environment that is driven by undersupply - we expect that undersupply to persist through 2000 at a minimum, with bit supply growth falling to 60% in 3000 from 87% this year. That in turn should result in a sharply reduced rate of price decline in price per bit - we are looking for a rate of decline of 15% in 2000, well below the rate of decline for 1995-99, and the closer we get to 2000 the more confident we are in that forecast. The aborted RDRAM ramp is likely exacerbating the problem We also believe that the repeatedly delayed shift to Rambus memory could be affecting PC manufacturers unequally, being as some PC companies have committed more than others to the RDRAM transition in Q4. Dell is a case in point - the company has been among the most ardent supporters of Rambus. The fact that RDRAM memory modules, which have been being built for the past quarter, are now probably not available for shipment in Q4 will cause some disruption for anyone depending on that supply to ship product in Q4. Expediting delivery of alternative products on short notice in the current DRAM market is expensive, and perhaps even impossible depending on the quantity being sought. Weak unit demand would be a problem for Intel in Q4, but RDRAM problems may be muddying the issue For Intel, the picture appears less clear. If sparse memory configurations in the PC market cause unit demand to weaken in Q4 our view for the quarter could be negatively affected. The impact would fall mostly in the consumer and small business markets, where elasticity of demand relating to memory configurations appears to be the greatest. Given the fact that Intel is ramping its more cost -competitive Coppermine product, we would expect to see Intel respond to any unit weakness in part by cutting prices on Coppermine, something that the company is probably going to do anyway as it attempts to nullify the competitive threat of the AMD Athlon. The real question to be answered is whether Dell's problems are specific to Dell, driven by delayed RDRAM launch, or whether they are indicative of a broader move towards reducing memory configurations. Given the degree of uncertainty driven by the RDRAM problems, we are going to watch and wait.>>>