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To: greg nus who wrote (3715)	1/13/1998 1:47:00 AM
From: Robert Walter	Read Replies (1) \| Respond to of 6843

Greg & All, Here is an interesting article regarding the outlook for capital spending projections for 1998 of the Semiconductor manufacturers. From Page One of Electronic News: January 12, 1998 Issue Forecasts Diverge At SEMI Meet By Dylan McGrath Pebble Beach, Calif.--Disagreement over the Asian financial situation and the overall health of the semiconductor industry led to wide discrepancies in wafer fab equipment forecasts delivered last week. While VLSI Research President G. Dan Hutcheson is forecasting a healthy 20.6 percent growth for equipment in 1998, Clark Fuhs, director and principal equipment analyst for Dataquest, is less optimistic, predicting modest 1.8 percent growth for the industry. sumnet.com Robert

To: greg nus who wrote (3715)	1/13/1998 12:06:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 6843

greg - Re: "Paul your accounting is faluty. First the cost or makret rule inturpretation is incoreect." No it is not wrong. Intel's annual report states the following: "Inventories are carried at the lower of cost or market. Cost is computed on a currently adjusted standard basis (which approximates actual cost on a current average first-in, first-out basis)". See Intel's 1996 Annual Report, Page 22, Right Hand column, middle of page. I confirmed this with Intel's investor Relations before I did my analysis. Perhaps you should spend a little more time doing some research rather than writing extensive, verbodse, erroneous and oblique arguments based on your misconceptions. Paul

To: greg nus who wrote (3715)	1/13/1998 12:11:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 6843

greg - Re: "a Mean,Lean AMD Junk Yard Dog is an advantage to being a 800 pound Intel Gorilla. " Why has the lean and mean AMD DOG been LOSING MILLIONS over the past year and a half while Intel, the 800 pound Gorilla, has been banking BILLIONS and BILLIONS in profits? Is your thought process completely divorced from the reality of the situation? Paul

To: greg nus who wrote (3715)	1/13/1998 5:46:00 PM
From: Larry Loeb	Read Replies (2) \| Respond to of 6843

greg, My understanding of the comments were that there were order cancellations for 3 million cpus (for notebooks). If this is the case, there would be no CoGS charge or revenue recognition. There would only be an additional 3 million cpus to be sold to other vendors. As these are likely to be the latest chips, there would be no writedown. To the best of my understanding, Intel does not take returns of CPUs. That would be the only situation where your scenario might be possible. It is highly unlikely, even then, that the market value of CPUs would be lower than Intel's cost. In any event, INTC reported a slight finished goods inventory increase from $401 million to $514 million. I haven't done the turnover ratios, but it doesn't seem out of line. Certainly the Asia situation has created problems for Intel, but they appear manageable. By the way, I was happy to hear that AMD's numbers were better than projected (like INTC's). We can all look forward to some good price action tomorrow. Larry