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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: E.H.F. who wrote (23204)	3/24/1998 1:36:00 AM
From: Nicholas	Read Replies (1) \| Respond to of 97611

In addition to the doomsday effect on the market, we may also see companies suffering from the Y2K bug suing hardware and software companies to recover for damages suffered. Whether the companies are liable is another issue, but IMO, it could slow down growth under the legal mess that will ensue. Check this out: "Compaq may see an increase in warranty and other claims as a result of the Year 2000 transition. Such claims, if successful, could have a material adverse impact on future results." compaq.com Nicholas

To: E.H.F. who wrote (23204)	3/25/1998 6:15:00 PM
From: E.H.F.	Read Replies (1) \| Respond to of 97611

Digital: Rumors Of Alpha Demise Are Exaggerated (03/25/98; 11:33 a.m. EST) By Mitch Wagner, InternetWeek Digital Equipment on Tuesday said a pending deal to sell its Alpha manufacturing plants to Intel will strengthen Digital's commitment to Alpha, rather than weaken it. When the two companies announced the $700 million deal four months ago, users feared it was a sign of the beginning of the end for Alpha, as Digital already has a strategic commitment to deliver Intel-based PCs and plans to migrate to the 64-bit Merced chip when that becomes available next year. But reports of Alpha's demise are much exaggerated, said Jesse Lipcon, vice president of the Unix and OpenVMS systems business unit for Digital. "There are concerns about Digital giving up control of Alpha. "But in fact, we did not give up control of Alpha. The concerns are a result of people misinterpreting the deal," Lipcon said. "What is it that we've done that would give anyone the idea that we are abandoning Alpha?" The deal is currently pending review by the U.S. Federal Trade Commission (FTC). When it was announced, Digital said it was expected to conclude within six months. Concerns about Digital's abandoning Alpha were caused by erroneous media reports that surfaced a month before the deal was announced. The reports said Digital was selling the chips, designs, patents, and plants -- in other words, everything associated with Alpha -- to Intel. In fact, the deal contains provisions designed to ensure that Digital can keep moving the chip forward. Digital retains rights to the Alpha design, and will have a contractual relationship with Intel requiring the company to supply Digital with chips. Moreover, beginning in late 1999, Alpha will share the same 0.18-micron process fabs as Intel's Merced chip, meaning that any changes Intel makes to the Alpha process will be reflected in Merced production, and vice versa. Digital is simply moving to a "fabless" processor model, the same business plan used by Sun Microsystems in its Sparc designs, Lipcon said. The company expects to save the $200 million per year it spent to keep the fab up and running. Despite that investment, technology at the fab was lagging six months to a year behind Intel's fabs. Digital was only spending $75 million on research and development of the Alpha chip, a cost it will continue to incur. Two other benefits of the deal for Digital: It saves money buying the chips from Intel rather than making it in-house, and Intel will pay royalties for access to Digital's patents. Specifics of those plans have not been disclosed. One big question mark in the future of Alpha lies with the proposed buyout of Digital by Compaq Computer. Lipcon said he expects Compaq to continue supporting Alpha. Compaq has sent two letters to Digital customers assuring them of Compaq's continued support for Alpha, Unix, and OpenVMS, and Compaq and Digital have together taken out a series of ads designed to assure customers on the same point. Alpha differs from Intel because it is designed for more high-end, faster machines. Currently, Alpha is 64-bit rather than Intel's 32-bit, meaning it can process databases faster, since it can cache larger portions of the database in memory. Alpha also tends to beat Intel on integer performance by a factor of 1.5 to 2, and on floating-point performance by 1.5 to 3. While Merced will be a 64-bit chip -- eliminating that advantage for Alpha -- Digital expects to keep Alpha's performance ahead of Intel offerings, Lipcon said. Also, Digital is developing new technology, called Symmetric Multi-Threading (SMT), designed to make Alpha perform better in a parallel-processing environment than Intel chips. "We will be able to build far more scalable, far more cost-effective chips out of Alpha than our competitors, who start with more general-purpose microprocessors and have to build functionality around the chips," Lipcon said. E.H.F.