David, RMBS appears to be in a contracting triangle
geocities.com
Fundamentally I have questions about whether they will be able to deliver the next generation chip platform.
I do not like that Jim Seymour is as skeptical of RMBS as he is.
It is a very volatile stock, that is often difficult to make good TA sense out of.
I have watched people buy it and put it for the past 18 months...I normally stand and watch.
Also insiders have been selling all fall, over 100K of shares.
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Intel: Sideswiped Again?
By Jim Seymour
Special to TheStreet.com
11/12/99 4:09 PM ET
We're playing "kick 'em while they're down" again on the Street.
After Joe Osha, the Merrill Lynch semiconductor analyst, chopped his rating on Intel (INTC:Nasdaq) Friday morning to near-term accumulate from buy, the market started whacking the world's premier chipmaker, and by midday Friday, Intel was down about 4, or 5%.
Intel: Join the discussion on TSC Message Boards or go to the
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Other chipmakers slipped, too -- in sympathy? -- despite the highly Intel-specific comments from Osha. At midday, Micron Technology (MU:NYSE) was down 3 1/16 to 72 7/16; Altera (ALTR:Nasdaq) was off 4, about 6%, to 63 3/4; Texas Instruments (TXN:NYSE) ebbed 2 1/2 to 98 15/16; and Novellus (NVLS:Nasdaq) sagged 3 1/8 to 94.
Even Advanced Micro Devices (AMD:NYSE), which startled the Street with guidance this week that it may actually report a break-even quarter and jumped 23% Thursday on that good news -- got thumped today, off more than 6% to about 26 1/2 Friday afternoon.
The Philadelphia Semiconductor index, or SOX, was down today almost 15%, to around 645. (But remember what a run we've had: The SOX is up better than 80% since the first of the year.)
Look, Osha's Intel downgrade may or make not make sense. But the story at Intel is brighter than today's market action indicates. As for the other silicon shops crunched by the fallout from the Intel downgrade ... well, they deserved better.
One of the three knocks by Osha was that Intel's long-promised 64-bit chip, called both Merced and IA-64 when it was in the development stage but now bearing the unforgivably ugly name Itanium, will take longer to gain traction once it ships next year than many investors expect. Maybe.
But not much longer: This is a chip that computer makers have been getting ready for years.
More to the point, it's a chip software makers have been ramping up for, too. Ironically, we also heard Friday a confirmation from Oracle (ORCL:Nasdaq) that it is preparing a version of its market-leading Oracle 8i database software for Monterey-64, the 64-bit operating system coming to market next year as a joint project of IBM (IBM:NYSE), Santa Cruz Operation (SCOC:Nasdaq) and Sequent Computer Systems.
It would be hard to overstate the importance of Monterey, a Unix variant which blends features of IBM's AIX, SCO's UnixWare and Sequent's Dynix. This is a cut-'em-off-at-the-pass run by the three partners to establish Monterey as the industry's 64-bit Unix standard, positioned up against both the coming 64-bit version of Windows 2000 and other Unix developers' efforts.
Although Sun (SUNW:Nasdaq) says it will have its 64-bit version of its Solaris Unix ready for the Itanium, and Hewlett-Packard (HWP:NYSE) promises a 64-bit H-P UX version next year, too, the IBM-led Monterey consortium thinks it can score a beat on the competition by being first to support the Itanium with a finished product. That's important, because if they succeed, they'll tie up major software makers, which want to ship one 64-bit Unix version, for the one leading 64-bit operating system, not spend their resources endlessly porting their applications to other flavors of Unix and to Unix-like Linux.
It doesn't hurt a bit that the IBM group already has Monterey up and running on early test versions of the Itanium chip.
PeopleSoft (PSFT:Nasdaq), IBM subsidiary Tivoli, Baan (BAANF:Nasdaq ADR), Computer Associates (CA:NYSE), Informix (IFMX:Nasdaq) and other major enterprise software application developers have already committed to Monterey.
In other words, to Intel's Itanium.
So both operating systems and important, industry-standard applications look as if they'll be ready on time for Itanium's rollout.
As we move into the 64-bit generation of silicon, computer makers are ready, too, to roll out Itanium-based systems.
The obvious advantage of 64-bit chips is that they can handle data in 64-bit chunks, twice as large as the 32-bit clumps handled by today's leading 32-bit chips, such as Intel's Pentium III. But the less-evident advantages of "64-bitness" will prove at least as important: 64-bit CPUs can manage huge databases much faster and can manage much larger pools of memory, making things move along even faster.
Barring further delays in shipping the Itanium -- Intel already absorbed some slippage in late summer, delaying shipment of production-level Itanium chips to next summer or fall -- we're going to see an explosion of demand for this hot chunk of silicon next year.
And if that's not enough for you, Intel's got the follow-up chip, McKinley, on track, too, for delivery in 2001.
A second issue cited by Osha was the continuing delay and the technical problems with Rambus (RMBS:Nasdaq) memory designs, which Intel has been trying to establish as the industry standard. I've been a Rambus skeptic for a long, long time, so I wasn't surprised last month when Intel had to delay shipment of a key Pentium III support-chipset because of Rambus problems.
But Intel doesn't need Rambus and its claims of improved performance to hold on to its overwhelming market lead.
Finally, Osha's third worry is an ascendant AMD. Readers may remember that I've been seduced more than once by AMD's technical prowess in chip design, especially the current Athlon chip, which in some tests comes off as the speed leader among today's 32-bit CPUs.
I reiterate that becoming a chip powerhouse demands more than design skills: You've gotta make 'em with an acceptable yield; you've gotta have front-office smarts to keep the business on track; and you've gotta get significant design wins, as major manufacturers choose your silicon for their new computers.
Yes, AMD's done well on design. But it's done abysmally on the last three counts.
I'd love to see AMD emerge as a serious, continuing competitor to Intel, pushing the edge of the envelope on processor performance.
But I no longer expect to see that happen. AMD succeeds only in fits and starts. Intel is the turtle to AMD's hare, steadily sopping up market share and hitting design and production schedules. Sure, Intel has had its share of embarrassing delays, but delays are endemic to the business.
What counts is market share ... and profitability. Taken a look at Intel's percentage of the mid-to-upper-end PC market lately? You know -- the parts where all the profits are?
I'm not worried about Intel. Especially with the Merced and then McKinley product cycles coming up, this is damned near a widows-and-orphans stock, one to salt away in the sock drawer for a few years.
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