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

To: Aaron Cooperband who wrote (46242)	1/22/1998 8:26:00 PM
From: Paul Engel	Read Replies (2) \| Respond to of 186894

Aaron - Re: "Will Intel's production be capacity constrained once they start shipping Merced?" This is a very good question. First, the Merced will be built on a new 0.18 micron process - starting in Oregon at D1B (Oregon Technology Development fab). The chip will go into high end servers and I would suspect that the initial volumes will be low. Customers will buy perhaps one of these beasts just to see what it does, develop/debug software systems, etc. To hazard a guess, I'd say Intel will be shipping a few thousand a month for the first 6 months or so. On 8 inch wafers, at a bare minimum ONE DIE PER WAFER, Intel would only need a few thousand wafers per month to support this production. So I would suspect that initially, Intel will have no problems supporting this ramp. In September of this year, Fab 14 (Ireland) is due to come on stream with the 0.25 micron process and Israel (Fab 18) will probably come on stream late in Q498/early Q199, also on 0.25 micron process. A good rule of thumb - Intel's 0.25 micron Deschutes (131 sq. mm.) is about the same size as the 0.35 micron Pentium MMX (128 to 140 sq. mm). Assuming comparable yields, a 0.25 micron conversion will allow Intel to support the Pentium MMX to Deschutes conversion with only a minor impact on volume - the 0.25 micron process uses an extra metal layer so it has a few extra masking steps, CMP steps and the C4 bump process. The new fabs - Ireland and Israel - will allow for volume expansion - to support >100 Million CPUs per year. AS Intel's chip set volumes grow - the 440BX, Orion 2, Camino (for Katmai) and the chip set + graphics combo chip, Intel may need to add additional capacity. To some extent, DEC's FAB 6 that Intel is acquiring may be a critical addition for this purpose. I would suspect that the "delayed" Fab 16 (Fort Worth, Texas) can be re-started in late 1998 if the Asian Currency/Commerce crisis subsides and Intel's new chips - Mendocino (Deschutes + L2 cache) start to eat up additional Fab capacity. This could be online in the year 2000. It would only make sense that Fab 16 will be brought up as a 0.18 micron fab to handle the ramp up of new devices in this process, in addition to Merced - Willamette, Katmai shrinks, etc. Paul