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

To: Dan3 who wrote (136878)	6/7/2001 9:20:21 AM
From: Road Walker	Read Replies (1) \| Respond to of 186894

Dan, re: "What will happen to Intel after it finishes spending the remainder of its net assets on new FABs all coming on line just-in-time for the 2001-2003 semi glut?" I'll let other address the inaccuracies in your posts, it's almost a full time job. But what will happen IF Intel were to have a lot of capacity, and the demand wasn't there, is that Intel would sell it's products for much lower prices. And both Intel and AMD will become really lousy investments. As an AMD investor, that would probably make you very happy. Have a nice day, John

To: Dan3 who wrote (136878)	6/7/2001 1:38:10 PM
From: D.J.Smyth	Read Replies (1) \| Respond to of 186894

dan3 "20% growth times .85 (after this years decline), just about equals 1. So 2002 sales are estimated to be about the same as 2000 sales. But there will have been a huge increase in FAB capacity over that period, so the 25% growth in 2003 would do little or nothing to help margins." revenue growth and unit growth should be separated. a "huge" 30% growth or increase in FAB capacity will be coming on line toward the end of this year and through 2003. if it costs $.80 to build where $1 was previously spent, I only need to sell 10% more units to increase profits if unit receipts, per $1, have also dropped but 10%. so, profit from flat revenue is relative to unit costs, the increase in the number of units sold, and revenue per unit. even in a flat revenue environment, INTC builds is cash war chest by another 10%; not to mention what happens in an increasing revenue environment. INTC will remain and increase its cash riches.

To: Dan3 who wrote (136878)	6/8/2001 7:01:00 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Hi Dan, RE: "25% growth in 2003 would do little or nothing to help margins." I tend to view this differently. A stock price can increase because of expense cuts or revenue increases (assuming reasonably fixed GM) and this can be particularly powerful when both of these occur at the same time. So, I think when rebounds occur, they tend to be powerful because the growth rate increases as a business recovers and grows, and this combined with expense cuts at the same revenue level, helps fuel the stock price. i.e. A company makes R in Revenue when expenses are X, but after a contraction and during a recovery to R, the expenses tend to be (X - cuts), which means earnings could be better for the same revenue level R. And assuming the business growth rate increases, which it would in a recovery, then C would also increase because of increased earnings from those increased revenues, where C = P/E. So, when a recovery occurs, I believe two things happen, C improves because growth rate increases and E tends to get better (because expenses have been cut), which means P = EC = (increasing E) (increasing C) = exponential**2 impact on P in a recovery. Since the price of the stock is a function of both expenses cuts multiplied by a factor of the increase in revenue growth (and assuming reasonably fixed GMs), the impact appears it could be powerful. Regards, Amy J