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To: akidron who wrote (18020)	3/21/1998 1:58:00 AM
From: Gottfried	Read Replies (1) \| Respond to of 70976

aki, you said > intc will never have the margins it once did... I am not saying it is going away...< As an INTC holder I'm very much afraid this will happen. GM

To: akidron who wrote (18020)	3/21/1998 2:10:00 AM
From: David Rosenthal	Read Replies (1) \| Respond to of 70976

Akidron, As far as Intel et al goes I agree with you. I would suggest one small addition. The underlying driving force is CPU saturation. Intel was happy to cede the low-end of the market until they discovered that that was where most of consumer demand was. They had to play there. Now, with tight margins, AMD, Intel and IDT are shrinking feature size to lower cost. Unfortunately for all of them, this will lead to more saturation and price cutting. The lowering prices of business PCs you mentioned has already started to show up. And my feeling is that low prices stimulate what is left of pent-up demand in the market. Once this demand is filled then the PC food chain will be left with lower margins and leveling sales. Some of the articles posted this evening say otherwise about leveling sales but some recent news items suggest to me that this may be happening. Capital spending is definitely going to be affected. AMAT has a unique position of being able to supply so many different types of equipment but if chipmaker's money is tight the semi-equips will be hungry. And if Lam, Novellus or some other supplier lowers prices, AMAT will have to also. This is not all doom and gloom but it seems that semi-equip growth rates will slow until international demand picks up. Dave

To: akidron who wrote (18020)	3/21/1998 6:36:00 AM
From: Jim Baker	Respond to of 70976

akidron, Very well said, and i agree, for this seems to be the thinking all around. However, I think (read, hope) that there are some very bright people working on what will be the next killer app. Maybe video, voice, DVD or some combination that will propel the next generation of chips. Remember the first telephone answering machine, the first fax, printer, scanner, etc.. these have now all come together in one box! Perhaps we are just in that time frame where everything is resting, and people have a difficult time seeing what is just over the horizon. Think back , if you are old enough, ;) to before color, some said who really needs it, or before GUI, or the mouse...well sometimes change comes rushing in, other times it sneaks in. Profits rise and fall, value is what counts (see KO). Best Regards

To: akidron who wrote (18020)	3/21/1998 9:48:00 AM
From: Clarksterh	Read Replies (1) \| Respond to of 70976

aki - the breath of INTC's margins has powered the techs for a long time NOI but what does this mean? Certainly PC sales have powered the semi industry, but INTC's margins? If PC sales had remained the same, and INTC had had lower margins do you think that the semi industry wouldn't have grown as fast? For example, DRAM has very low margins normally, and yet they have grown as fast as Intel. intc will never have the margins it once did... I am not saying it is going away... please don't go that way on me.... and semi-equips like amat will also find that their margins come under pressure.... Maybe they will maintain margins, maybe not. Remember when the same thing was said when AMD and Cyrix came out with the 486, and the 486 started appearing in all sorts of new devices (like hand-helds)? I vacillate on this issue, so I am not making a guess here, but only noting that it is very hard to predict. I think a bigger issue is market saturation. A very high percentage of US households now have a computer. In order to keep up the growth rate they will have to change strategies (sell multiple computers to one home, or wait till Europe and Asia become big enough to take up the slack, ...) and I think there is a good chance that this transition will cause a temporary leveling in unit sales at some time in the near future (in the next year). Finally, as for AMAT. In the long term (2 or 3 years) AMAT does not live or die based on the PC market. Right now a leveling in PC sales would cause some hurt for AMAT, since PCs are the biggest individual segment, but other segments would soon take over. Again, it the transitions that would hurt. Clark

To: akidron who wrote (18020)	3/21/1998 1:30:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Re:... it dealt with the comoditization of the cpu market aki, First, as CH pointed out, this has been said many times before (486, 586 yada yada yada). I am not sure whether or not this will come to fruition, my guess is no and for the following reason. CPU's are becoming increasingly complex and new generations will take HUGE sums of $$ to develop/manufacture. IMO, this is why we are seeing the INTC/HP partnership with Merced, INTC's next chip. The costs involved in getting one of these to market is too large for INTC to bear alone. And if they cannot do it with the $9B+ cash hoard, then how in he is AMD going to do it? IMO again, there will likely be partnerships down the road as no one company wants to bet the farm on the success of one product. Probably see INTC/HP and IBM/AMD or something similar. As to the commoditization, it is waaay to early to tell. But if I had** to wager, I'd place my bets on INTC. INTC is not known for giving up any markets; but if the margins are thin enough on the sub-1000 pc's then we may see a change of heart by INTC. However, this runs counter to their scorched-earth strategy, where they simply cut the prices of low end chips so the competitors can not make any $$ to invest in future generations. My guess would be on the latter, but since this appears to be another "inflection point"(from A. Grove's "Only the Paranoid Survive") there could be any number of changes INTC makes in their strategy. Guess what I'm trying to say is we'll have to wait and see<GGG> regards, Brian

To: akidron who wrote (18020)	3/22/1998 5:11:00 PM
From: Richard Ruscio	Respond to of 70976

aki, My opinion: there will be a huge increase in the number of units sold (cpu's, drams, disk drives, cases, power supplies, ...). The margins will shrink. Capacity will have to increase (200MM PC's to 1000MM PC's, al a Intel is a LOT of sand and plastic). Parts suppliers (Intel, et al), and box makers (Compaq, et al) get smaller margins. If you want to believe they do / don't make it up in volume go ahead. Compaq, with DEC, seemed to vote "NO". Dell, with a PE in nosebleed territory, seems to be getting "YES" votes. Capacity increases favor factory makers (AMAT, et al), process control / productivity improvers (KLAC, et al), and make you wonder a lot about channel shifts. Waiting for AMAT in the 20's, KLAC under 33 ... rr