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

To: Barry Grossman who wrote (124991)	1/16/2001 12:51:23 PM
From: Elmer	Read Replies (1) \| Respond to of 186894

Re: "On the surface, the acceleration of Pentium 4 looks like a positive move, especially if it helps Intel boost its market share. But analysts say capturing significant market share could be a costly move" I disagree with this statement. Assuming Intel is not capacity constrained, it makes more sense to make P4s than P3s because P4s have more profit in them than P3s even with the larger die and lower yields. EP

To: Barry Grossman who wrote (124991)	1/16/2001 1:35:39 PM
From: Tenchusatsu	Read Replies (2) \| Respond to of 186894

Barry, from the article, Joe Osha's "words of wisdom," <"It is also possible, however, that Intel intends to take a substantial hit to gross margin in 2001 to establish P4 in the market even before the P4 becomes available on the more price-competitive (0.13-micron) manufacturing process," Osha's report continued.> If Intel has surplus manufacturing capacity, it makes sense to crank out more P4's which sell at higher prices anyway. Gross margin for 2001 is already going to be impacted by the market slowdown, but Osha makes it sound like more P4's will be the cause of lower margins. In truth, it's the other way around: lower margins is exactly why Intel is shifting to P4. Besides, despite the larger manufacturing costs, I'll bet P4 still has higher gross margins than P3. Osha should know this as well, but of course, why should logic get in the way of being an analyst? Tenchusatsu