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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Hippieslayer who wrote (7444)	3/18/1998 9:51:00 PM
From: Harold Engstrom	Respond to of 11555

Good find, Fugazi. This article certainly supports the argument that a major 1st tier OEM wants to use the C6 or C6+ and needed assurance that legal and capacity issues would not crop up. It was also reassuring to see that the writer's opinion was that IDT could meet its capacity requirements without the IBM agreement. Now, there should be some real believers among the investment community. IDT should be considered as a real competitor and a formidable one. Don't forget that microprocessors may also be the narrow end of the wedge for IDT's other products. Does anyone even remember that IDT makes other products?! Don't forget Clear Logic, the switching products, MIPS, SRAM, logic, etc...

To: Hippieslayer who wrote (7444)	3/18/1998 10:45:00 PM
From: Samuel R Orr	Read Replies (1) \| Respond to of 11555

That was an interesting article which points out elements of microprocessor strategy intended to chip away(pun intended) at Intel's present monopoly. There is little question Intel might attempt to sue IDT for patent infringement in making the C6., but will not sue IBM for the C6+. Please note carefully that the contract with IBM was said to be for the C6+, not the C6. It involves a four-layer metal, quarter micron process(which can't be trivial). To the best of my knowledge, IDT's Oregon fab is working toward a quarter micron process, but is now running .35 micron technology on the C6. Glen Henry is an IBM fellow, and should be sufficiently familiar with IBM's fabrication process to design a mask set they can build. That's a big plus. IDT'S agreement with IBM will not result in immediate revenue. However, if the C6 is well received and the Oregon fab can produce it in moderate but increasing volume, a first tier company MIGHT sign up to use the C6+ for something like a notebook computer(low power, fast chip) if IBM were making it. That would guarantee two things: no suits; volume capacity. Whether or not the agreed-on price per wafer and die yield per wafer will allow IDT to make much money on the deal with IBM is hard to call, but they should have a chance to enter the low-cost computer business and get into Intel's knickers. Meanwhile, IBM keeps its fab running. No-one wants to make DRAMs today at the prices they command, and IBM doesn't intend to allow a billion dollar fab to stand empty. In a manner of speaking, it could be a Win-Win situation for both IBM and IDT. I have, in the past, worked to supply integrated circuits to IBM. They drove a hard bargain, liked to call all the shots, and let you know who held the power. How they will function as a supplier in today's environment is an interesting question. You traders most likely have little interest in the preceding analysis, but the net result some analyst SHOULD figure out is what's happening will have a positive effect on IDT's future earnings and profit margins. They may never get anywhere near Intel's past margins, but should be vastly better than those made on SRAMs. If I am correct, IDT stock should sell for twenty bucks by the end of the year. If it does, momentum players and cretins jumping on the bandwagon late will take it much higher than it ever should go. I will have sold it and watch bitterly as it again doubles in price. If nothing else proves true, my last sentence is gospel. Things are looking up, but six month's patience will be required. The fact that the technology sector is now in disfavor with the herd will lengthen the time it takes to move IDT's stock price higher. Good luck out there.