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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: etchmeister who wrote (16617)	11/21/2005 10:36:04 PM
From: robert b furman	Read Replies (1) \| Respond to of 25522

Hi etch, I've been studying the market segment of High speed graphic chips. Currently Intel has a #1 market share,but they sell graphic chips that are "built into" the mother board. Back in 99 and 00 they were not in this market - Nvidia and Atyt were the kings.But to get them you had to buy a sepoarate upgrade "a discrete "product. Now the gamers pay as much as $600.00 for the best of breed High speed graphic chip(only an obsessed few admittedly).Plus the high end workstation that has a more work oriented justification - however that is perhaps an obsessed purchase as well.GG As I study the high speed graphics chips I note that Samsung has designed memory chips that can accomodate faster speed graphic chips(higher clock speeds).It appears many are unhappy that memory has not kept up with the graphics chip speed capabilities.Deja Vu the pentium mega hertz marketing buzz,a marketing approach that Intel worked to great success - I suspect they intend to utilize superior manufacturing techniques to their advantage for a premium price again). I'm thinking that Intel wants to give Micron a bump up in the learning curve on how to build faster memory ,that might just complement their need for faster graphic chips. In 99 they didn't do graphic chips at all - in this last quarter they held the # 1 market share,but with a close association with the mother board and the microprocessor as well as multiple graphic chips. The key word here is multiple graphic chips. For every high dollar micrprocessor there are multiple graphics chips.The speed of graphic chips capabilities are being held back by slower memory designs. I'm beginning to think that Intel wants an "Inhouse memory maker" that can hold pace with their need for faster memory and therefore create an opportunity for their "faster clock speed" graphics chips to become a "standard feature" that is included in the chipset and the consumer buff does not need to go out and overpay for state of the art "discrete" grapic chip sets. Over the last 5 years -they've gone from no graphic chip production to number 1 - but they more or less did it through being included in the mother board /chipset at no extra cost. If there were to be an equivalent performance to the discrete (and pricey) graphics chips at say half the cost, there may well be a BIG market with a margin that was around their target of 60%. Heck if you are selling a microprpocessor at 250.00 and a discrete graphics card cost of 600.00,You could offer a combo of better performance(or at least equivalent performance) for 400.00 and win the world! - BUT you'd have to have a very efficient microprocessor,graphic CHIP and a coordinated high clock speed memory chip as well. Once that was accomplished - you'd tie it all together and wipe out the premium that Atyt and Nvidia enjoy. Once you own the low end you attack the high end and if you are capitalized to play the market share game with no return - eventually you'd own the whole market. A page taken from the play books of Microsoft and Totyota! It is a big long term play with huge volume and profits to be gained - the stake of which Intel knows and likes the best. Am I thinking correctly? I'd value your thoughts and anyone elses. TIA Bob