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

To: Ibexx who wrote (42215)	12/14/1997 9:30:00 AM
From: gnuman	Read Replies (1) \| Respond to of 186894

i740, An interesting product From what I've read, Intel plans to introduce this in Q1 at an ASP of $20 - $30. If Intel were able to capture 1/3 of the market at the high end of the ASP we're looking at an additional $1 billion annual revenues, (about 4% of total sales). I estimate this based on a total market of approx 100 Mil graphics chips per year, with 33 Mil going to Intel. (I assume 1 graphic chip per cpu). If Intel can maintain a COGS in the range of $10 - $15 it will have little impact on GM. Perhaps Paul Engel can comment on the COG for a chip like this. (Actually, since it's such a small percent of total revenues, it won't have a lot of impact either way). So basically I see an additional $250 Mil/Qtr in revenues, and another $125 million in earnings. The impact, of course, is proportional to the market share that Intel can capture. While not a lot of bearing on either earnings or proftiablity, it could increase Intel leverage for their other businesses. The only real negative I see for this business is the tremendous volatility of graphics chip technology. The best and most recent example is S3. Seem's like they fell from their mighty leadership perch in the blink of an eye. I think primarily because they fell behind the technology curve almost overnight. And it looks like nVidia is the primary culprit. If you look at the history of the industry you find technology changing about every six months. Will this trend continue? If it does can a giant like Intel dance like the little companies? A lot of assumptions here. Be interested in comments.