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

To: Paul Engel who wrote (91692)	11/4/1999 12:22:00 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Paul, re: Reducing fixed cost The cost of the components for making a product are a variable cost, they fluctuate with the number of units made/sold. Higher costs for production are fine, as long as the selling price increases at the same percentage, you maintain gross margin. The current lowering of production cost is great news if they keep their selling price stable or above the percentage decline in the cost of goods sold (I expect they will, especially with strong demand). Fixed costs are different. In 1997, while revenues were declining, Intel added a huge number of employee's. Salaries are fixed costs, and a large increase mixed with revenue declines made it very hard to show good results. Subsequent to 1997, I believe they initiated a program to cut the increase in fixed costs. I'm just wondering if this effort is on-going. John