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

To: maui_dude who wrote (149719)	11/27/2001 12:29:24 AM
From: wanna_bmw	Respond to of 186894

Maui, Re: "I wish Intel is not thinking and planning based on AMDs lower yields. If they are not competitive based on cost, they better accelerate the hyperthreading roadmap or reduce the P4 die size (or accelerate 300 mm and .09)." I disagree. I think Intel's costs will get incrementally lower, but right now, they aren't in too much of a need with cost reduction. When AMD reduces their die sizes, they receive a cost benefit in raw materials, but they will still have all the fixed costs of running the fab, paying the employees, packaging the processor, etc. According to calculations from their balance sheets, they need an ASP of $75 to break even. If process improvements allow them to lower this to $65, will that make much of a difference? Will AMD suddenly have a huge advantage over Intel just because their processors are $10 less expensive on average? I disagree, and I tend to think that neither company is interested in letting ASPs fall further than they are now. Cost savings will probably benefit AMD's bottom line, but I don't think that in the short term they will try to use these cost savings to undercut Intel in price. These chips are already commoditized as they are, and OEMs will buy Intel CPUs, even if they cost $100 more than an AMD chip. Re: "Intel is sitting quite pretty with desktops until Hammer comes out. They now have to find a way to not lose too much on the laptop segment until P4 .13 mobile is released." I think Intel's real weapon for the mobile space will be Banias in 2003. I think that Pentium 4 will be tough to sell over Athlon 4, especially when AMD pumps up the clock frequencies with Barton, and Quanti-sells them to the retail end-user. Jerry may yet get his 50% U.S. retail mobile market share next year, since Intel will have a tough time ramping mobile Pentium 4 frequencies. The Pentium 4 is simply too large for mobile use, but Banias may win Intel back mobile market share the following year. If AMD is smart, they will forget trying to compete with Northwood on the desktop (until Hammer launches, of course), and concentrate on the higher margin mobile space. While they may lose a couple percent market share, they would really maximize revenue and profits. Not sure if Jerrihad Sanders would go for it, though. wbmw