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

To: smooth2o who wrote (183654)	3/4/2006 8:52:36 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 186894

smooth, Intel's warning was not very clear. This is how I understood it. There is no doubt that revenue will be down. But why so much ? There are 2 causes. 1- ASP for processors must be significantly lower. 2- Demand for higher end systems must be soft. And the follow-up conclusion has to be that Intel has not caught up with chipsets, and so AMD is gaining share in that segment. I think it is total non-sense for anyone to claim that AMD is winning business on some technology merit. They're just selling chips cheap. $50 per unit cheaper than Intel. And consumers are right in preferring the lower price chips. They work just as well. However, the next question has to be whether Intel can lower the price of its low end processors to match AMD and recover share. of course first they have to ramp up with chip-set production. Then the next question is: can Intel make its desired profit on the combined processor and chipset, even when lowering the price to the level of a combined AMD processor and 3rd party chip-set ? I think that answer is a definite yes. For one thing, Intel keeps the markup on the chip-set, to offset the discount on the processor. And second, the fabs that make chipsets are old and obsolete (for processors) and fully depreciated. This is all very simple. I'm not surprised that none of the AMD-crazed analysts mention this. I think they still have left-over AMD shares to distribute. But when the fall comes, it will be a tumble. Mean-while Intel will still be in the woods for a few months. Sarmad