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

To: Saturn V who wrote (133828)	5/1/2001 4:04:34 AM
From: pgerassi	Read Replies (1) \| Respond to of 186894

Dear Saturn: What you forget that if the FABs become obsolete quicker, they can't be paid for by those lower margin products. Also, if sales tumble, more cost must be placed on those that are left. Soon the prorated fixed costs overwhelm any profit. That is why it may work when the units grow but, are much worse when units shrink. There is a penalty for overbuilding. Before Intel could foist off lagging products at high prices until the fixed costs were paid for. That was the luxury of a monopoly. They now have competition and both unit decreases and pushes for product not yet ready, cause this policy to backfire. Pete