Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Engel who wrote (50215)	3/9/1998 4:27:00 AM
From: ed	Read Replies (1) \| Respond to of 186894

So, PF did not say what is the total inventory, but start to cut back in early Jan of 98, however based on the information it is about 0.2MM units. So, you tell me how long will take CPQ to clean those inventory with a total sales of about 13MM units per year ? and I do not think the inventory alone of CPQ will cause a 10% shrink of revenue of INTEL, am I right ? It must be something wrong, the competion and the BTO business models which force INTEL to place huge inventory inorder to meet the on time delivery requirement from the box makers. I think you realize that INTEL also sit with big inventory too !!!! Yes, AMD had a yield problem , but IBM do not. The yield problem can be caused by either the process itself or the design, I think you realize that. Will IBM's process fix the yield problem ? I think so, I think you realize that before switch fab , you generally had to qual the fab to make sure the yield , quality is ok, am I right? As to the National's deal with TSMC, it is not a rumor, and had been confirmed locally in Taiwan.The newspaper already talked it. The INTEL's myth is "INTEL INSIDE", but it did not play now when people realize that CPU from INTEL or CYRX or AMD really make no difference, the difference is the price. This is the competion from the low end, and in the middle end, not too much application for middle end Pcs at all, then why should I bother to spend more money to buy a middle or even high end PCS? especially , most of my application on PCs are word processing and C programming ? That is another problem for INTEL. INTEL has been released new CPUs too fast , which make consumers or customers hesitate to buy or upgrade. Why should I upgrade now when I know that my investment will be obsolete pretty soon ? The new BTO business model implemented by most box makers will force INTEL to build huge inventory to meet the on time delivery standard. I jump directly from 386 to pantium, and never think about upgrade to PII at all. My current note book meet my needs pretty well !!!! I think many people have the same thinking !!!!! This is the problem for INTEL, so you started to see the impact this quarter, and will see more in the quarters to come. If INTEL can still maintain a 70% of the market share of CPU, three years down the road, then it is very lucky. The PC market will keep growing fast , especially as the sub$1000 step in, many people can now afford. But that does not necessary benefit INTEL, since people now have more choice of CPUs, and the competition on CPU price will be fierce, this will of course benefit all those box makers. We already see IBM, CPQ endorse AMD and CYRX. As to the high end, you know what will compete with Merced. You do not need me to mention it over here. To tape out at the end of 1998, probably will take at least 6 months to go to formal production if you are very lucky for such complex chip, and the system based on Merced won't be available at the end of 1999. Of course there are many uncertainity down the road about Merced, such as: yield, debug ....etc, you name it .

To: Paul Engel who wrote (50215)	3/9/1998 12:05:00 PM
From: John Koligman	Read Replies (2) \| Respond to of 186894

Paul - Ed is correct about the inventory shortfall. I think I heard 200k units, either one or two weeks worth. Sounds like a bunch, but when you look at overall volumes of CPQ, it does not look that bad. You are a pretty level headed guy, but you sound a bit down on CPQ for using other makers chips. I keep bringing it up, but don't you think all boxmakers get a much better deal if Intel has to slug it out with AMD/Cyrix or others? Also, since CPQ is Intel's largest customer, it's pretty likely that if CPQ continues to have problems (and they said the problems were NOT consumer lines, but business - guess what chips live in their business Deskpro machines), then Intel will most likely also... John PS - As far as writeoffs, the prevailing view on the CPQ thread is writeoffs occur next quarter, and CPQ dumps everything in at that time. This drop also makes the DEC purchase that much cheaper, because the share/cash ratio is fixed, but not the share price. Not that we are happy about the recent price action in CPQ and INTC!