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

To: Amy J who wrote (140057)	7/25/2001 2:19:17 PM
From: Saturn V	Read Replies (2) \| Respond to of 186894

Ref < Chips and Technology Acquisition > Chips and Technology was founded in mid 80's and made splash with chip sets, which made it possible for the PC clone industry to introduce the latest processors at the same time as IBM or Compaq. However by mid 90's Chips and Technology was reduced to making Graphics Display Chips. It was acquired by Intel in late 90's. I believe that the Graphics Display Chips developed by C & T are a part of the Integrated Chipset and Graphics Adapters sold by Intel today.Integrating the graphic adapter into the chip set makes for a cheaper system.Thus the Intel integrated chipset are hugely popular, and I do not hear of other chipset manufacturers having succesfully executed a similar strategy. [ VIA, I believe also acquired S3 a graphics adapter company, and so in due time VIA should also have similar products].So Intel has a short term advantage over AMD, since it can justify the higher cost of a Celeron over an equivalent AMD chip. Buying the C & T technology probably gave Intel a head start in executing the Integrated Graphics and Chipset strategy. Thus the C & T acquisition was a worthwhile strategic acquisition,and has borne fruit. The impact of Communication acquisitions is not clear as yet. I believe that the Communication Sector at Intel made money for Intel last year, prior to goodwill charges. [Remember that the acquisition expenses are spread out over 3-5 years by the annual write off of a portion of acquisition cost]. The Communication earnings stink right now since all the communication customers like Cisco,Lucent,NT etc are going through a painful inventory adjustment.The CLEC and ISPs are struggling to stay alive. So the revenues of all communication component vendors have fallen by more than 50%. So there is blood at all communication component vendors. But once the inventories have depleted the situation will improve Intel apparently went on a random spree of communication acquisitions. Intel now sees a future in silicon part of the communication puzzle. I know that hindsight is 20/20, but this should have been obvious to most people, that Intel would have a major competitive advantage only in the silicon part of the communication business. Intel should not have acquired any system builders unless they contributed useful feedback to the in house silicon technology. This formula was expounded long ago by Gordon Moore who said that "Intels System Business should primarily be a shipping crate for Intel's silicon". Pruning will happen in Intel's communication sector, and hopefully the strategic investments will be retained, and others will be discarded. Recessions have a way of forcing companies to sit back, and make clearer decisions.