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

To: Jim McMannis who wrote (47086)	2/3/1998 10:40:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Jim - Re: "Why would Intel even want manufacturing rights to a chip that will compete with Merced? " All things being equal, I'm sure Intel would want nothing to do with the DEC Alpha. However, DEC filed a nasty patent infringement suit against Intel which, if litigated, could have drawn out for years consuming tens if not hundreds of millions of dollars - and at additional expense - such as loss of focus - by Intel. Clearly, DEC had ulterior motives besides monetary compensation. The wanted OUT of an expensive proposition - manufacturing their Alpha chip, maintaining a modern, expensive UNDERUTILIZED fab, and forced to pour in mountains of moola to develop succeeding generations of fab processes keep the ALpha competitive. Enter Intel. DEC succeeded in convincing the world leader in wafer fab manufacturing efficiency to do the Alpha processing for them as well as PAY DEC $700,000,000 for the fab that was sucking money out of DEC's bank account. For Intel - Alpha will be just another product manufactured specifically for one customer. As for Alpha - it won't compete with Merced. It is essentially a DEC product sold as part of a DEC server or workstation. DEC will also develop Merced systems - by virtue of their Intel agreement as well as a separate, related agreement with Sequent Computers. Re: "Could they just refuse to make or convieniently slow down the manufacture of the chip?" Intel will be contractually bound to produce those Alpha requirements stipulated by DEC. Moreover, I think DEC wants access to Intel's new technology - 0.25 and 0.18 micron processes - to keep Alpha competitive. Paul