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

To: Amy J who wrote (168153)	7/13/2002 8:51:35 PM
From: Elmer	Respond to of 186894

On a related note, Thread, Elmer, what is the state of Intel's processes and why are the margins so poor nowadays, they're at 49% down from 63%, a huge drop. Can't Intel do better? Improve the process or cut costs somehow? The margins and profits need to be improved. Can't comment specifically on Intel's yields except to remind you that Paul Otellini said Intel's yields are "World Class". Jerry Sanders said the same thing about AMD's yields but I'll just leave it to you to decide who to believe. I think ASPs are the issue here. I think we're going to have to get used to lower processor ASPs. That's why Intel is pushing so hard in other areas. They know they can't grow on uPs alone. Comms, wireless and highend servers is where the growth is going to come from. EP

To: Amy J who wrote (168153)	7/14/2002 12:19:56 AM
From: NITT	Read Replies (1) \| Respond to of 186894

Hi Amy, I was talking about the chipset, motherboard, software, and system work that Intel chooses to do in order to keep the market moving forward with their latest chips. On your margin question, it's simple... Volume, ASP, and cost impact margin. I think Intel said they got hit with ASP when they had the % of Celeron volume grow (It grew because Intel choose to not continue the market share losses, and in fact I think they are getting some back). In addition volume has not been growing much if at all. I think Intel's actual manufacturing cost is going down, but they need volume and/or ASP to grow also to see a benefit. I'm hoping that both volume and ASP start heading up again. If volume and ASP do not look like they are picking up fast enough, I would expect Intel to look at cost (can you say headcount) as a near term fix. If it get's that bad for Intel, I would assume that flow of red over in Sunnyvale would call for some drastic measures over there. Nitt

To: Amy J who wrote (168153)	7/14/2002 12:40:29 AM
From: Dan3	Respond to of 186894

Re: what is the state of Intel's processes and why are the margins so poor nowadays It's a business with high fixed costs and low variable costs. When volume goes down, so do profits - especially if your forecasts are based upon the theory that PCs are replaced by businesses on a 3 year cycle and the high number of systems bought in 1999 were going to be replaced this year.