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

To: pgerassi who wrote (140109)	7/25/2001 6:38:02 PM
From: Dan3	Read Replies (1) \| Respond to of 186894

Maxtor ships new server with Intel chip: entmag.com Four Ultra ATA/100 Maxtor internal hard drives give the thin device its storage capacity. The MaxAttach NAS 4300 also carries an 866 MHz Pentium III processor and 384 MB of SDRAM. The Maxtor MaxAttach NAS 4300 file server is available immediately and costs $5,999 Quantity one on pricewatch for PIII 866 is $138 - Maxtor probably gets them for about $125. If Maxtor sells that server into distribution for $3,000 after terms, co-op, and discounts, then CPU cost is 4% and the CPU represents 2% of the retail price. AMD would love to get $125 for an old Aluminum 866, so this is still a great deal for Intel. But it is another example of how a server market approaching $100 Billion in sales isn't necessarily going to be a bonanza for either AMD or Intel.

To: pgerassi who wrote (140109)	7/25/2001 6:57:30 PM
From: Tenchusatsu	Read Replies (2) \| Respond to of 186894

OK, Pete, several points I'd like to clarify here: <However, I do not count 1-2 way PCs as servers in the traditional sense. 1-2 way PCs can be combined to make servers but, they have a far bigger market on their own. Namely, the high end PC and workstation markets.> Indications are that workstations and high-end PCs aren't growing as fast as servers. And when I talk about servers, I do include single and dual CPU systems, especially the 1U ultra-slim kind. But with the back-end, there is still big demand for large back-end database servers, the kind that Sun and IBM currently dominate with their big iron. Intel wants to break into this market with Itanium and apply the standard high-volume economics to this high-end. Even clustered ultra-slim servers are inadequate for the back-end. <Systems interconnect will be easy and straight forward. HT will probably make the interconnect even easier and faster.> Unless AMD is working on an external interface, HyperTransport is limited to chip-to-chip interfaces. If anything, it's Infiniband which will serve as the system interconnect, not HyperTransport. But all this really doesn't matter. The standards are there to advance the industry, not serve as trump cards for any one company, including Intel or AMD. <Chipsets, SRAM memory, communication chips, and PCI interface chips are just some of the other chips that mean a greater slice of revenue just less GM but possibly more revenue and profits in absolute terms. Intel is already doing this and the revenue from them could even exceed the server CPU revenue.> As someone who works for and knows the revenue of Intel's server chipset division, I can say with complete confidence that you are wrong. In fact, I think my managers would be extremely happy if they could come close to matching the revenues and profit margins of Intel's server CPUs, even in "absolute terms" as you put it. <It is far more likely that AMD server revenue will be mostly taken from Intel and very few here would disagree with that (magnitude maybe but not the source).> If the server market is growing (excluding the current slowdown) as everyone is hoping for, then relative market and revenue share between AMD and Intel will be a moot point. Both companies will see their server revenue grow, and all of us will be happy. However, if the server market isn't growing, or if the margins are dropping (the net effect of slower growth or dropping demand), you WILL see both AMD and Intel hurting, but probably AMD more so as evidenced by the price war in desktops. In other words, you better hope that your prediction of a zero-sum game doesn't turn into a reality. Otherwise, you should save yourself the trouble, sell all your INTC and/or AMD, and invest your money elsewhere. Tenchusatsu