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

To: Tenchusatsu who wrote (129571)	3/8/2001 7:16:35 PM
From: Scumbria	Read Replies (1) \| Respond to of 186894

Ten, The die size of P4 is 3X PIII. That implies good die/wafer of ballpark 1:5 . Scumbria

To: Tenchusatsu who wrote (129571)	3/8/2001 8:15:18 PM
From: Dan3	Read Replies (2) \| Respond to of 186894

Re: We're in a demand-limited market environment... There is no such thing as demand limited, there is only "demand at a given price" limited. AMD has a business that breaks even for them at an ASP of $65 to $70 and Intel has a business that breaks even for them at an ASP of around $150. Intel has had the benefit of SMP and notebook chip markets where they had very little competition. But the bulk of all sales come in the desktop market. It is irrelevant that most corporate sales still go to Intel, since "parts is parts" and Intel desktop chips as "parts" must be priced to compete with AMD desktop chips. AMD's entry into the mobile and server markets has been badly delayed, but they weren't players in those markets, so it's only an opportunity cost. Intel's P4 has been a flat out disaster. The chip is too big to produce in large quantity, provides adequate performance only when coupled with expensive dual channel 6 layer motherboards, and absolutely requires the most expensive grade of Rambus for even adequate performance. Intel is now in a position where much of its production capacity is limited to producing desktop parts that aren't really competitive (PIII and Celeron). If AMD actually ships mobile and SMP parts in the next quarter, it could get really ugly for Intel. AMD will be thrilled if it can get to a $100 ASP - and it will mint money for its shareholders at such an ASP. AMD has just about finished its CAPEX program for .13 production which starts at the end of this year. Intel is $7.5 billion behind in CAPEX spending that is absolutely necessary to enable them to sell against AMD. I had to wait almost 2 weeks to get the particular Socket A motherboard I wanted. The high end Athlon speed grades are generally backordered by most of the pricewatch vendors. There is plenty of demand for AMD parts, particularly the more profitable high end AMD parts. This is largely due to AMD's very competitive pricing - but, given its $100 ASP business model, AMD is very happy with those prices. AMD isn't sitting on any fast depreciating inventory of high end chips, either. Intel will spend out its cash hoard, replace all of its suddenly obsolete existing plant and design new chips to try again in the next round of competition. Intel will remain a strong competitor, but near term, it is not looking good for Intel. I had feared that the current 1.2 and soon to be released 1.3 Thunderbirds were actually Palaminos shipped in a stealth release and that Athlon on .18 would top out around 1.4GHZ. Now there are strong indications that Palamino has some characteristics that make it a certainty that we haven't seen Palamino yet. P4 barely competes with Thunderbird, and Palamino is out next month. I'll stop - sorry for the rant, but this is exactly the scenario I was posting about last summer, and it's amazing to see it happen just as expected. Dan