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

To: Harry Landsiedel who wrote (91237)	10/29/1999 12:09:00 AM
From: Ian Davidson	Respond to of 186894

From the WSJ: October 29, 1999 Intel Calms Fourth-Quarter Worries, Says Computer Demand Tops Forecasts By DEAN TAKAHASHI Staff Reporter of THE WALL STREET JOURNAL Intel Corp. executives, calming worries about the fourth quarter, said computer demand remains stronger than expected and that the company doesn't expect difficulties from either the year-2000 bug or the Taiwan earthquake. The Santa Clara, Calif., computer-chip powerhouse, in a Web broadcast for analysts and reporters, also offered a window into its development plans for the next year. Planned products include a microprocessor operating at a billion cycles a second, or one gigahertz. Intel's stock has been hit lately by fears that Intel would be constrained by industrywide shortages of graphics chips and memory chips; those shortages could potentially limit customer demand for Intel's microprocessors. But Intel executives said they saw no external obstacles to growth in the current quarter. "The second half is playing out as we expected, with the exception that demand is stronger than we expected," said Sean Maloney, vice president of marketing. "The driver is the Internet." While prices for low-end PC chips have declined, Intel's revenue has remained relatively stable because it is selling a greater proportion of high-price chips for servers and workstations, said Paul Otellini, an executive vice president. And packaging and manufacturing advances over the next year will allow Intel to cut manufacturing costs as much as 50% for every Pentium III chip the company sells and 20% for every low-end Celeron microprocessor, he said. Analysts were reassured. "There have been concerns about Y2K and demand," said Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray in Minneapolis. "But Intel sees the whole picture, and they feel confident that they aren't constrained." The Web broadcast began after stock markets closed. Intel's shares closed on the Nasdaq Stock Market Thursday at $72.1875, up $2.75. Intel, challenged lately in chip speed by Advanced Micro Devices Inc., said it would introduce a chip family in the second half of 2000, code-named Willamette, that will be its first to top the one-gigahertz mark. In the first half of that year, the speed of the current Pentium III will reach 800 megahertz, up from 733 megahertz today, Intel executives said. More unusual is a microprocessor, code-named Timna, that will essentially be a single-chip computer, combining a microprocessor with other chips that perform system logic and graphics functions. The chip, in the second half of 2000, will be targeted for low-cost computers as well as notebook computers. Craig Barrett, chief executive officer, said Intel this year would double its equity investments in smaller companies compared with 1998. So far, it has invested in 300 companies now valued at $4.8 billion, he said. Intel has acquired a number of communications companies for more than $6 billion this year, making 1999 the first year in which acquisition costs will be larger than its capital expenditures for semiconductor factories. Mr. Barrett predicted more acquisitions, though not necessarily at the breakneck pace of one a month. "Intel has prospered by being an extremely adaptive organization," said Chairman Andrew S. Grove. "We are in the process of adapting to take advantage of our new environment." Ian