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

To: kolo55 who wrote (55703)	5/16/1998 5:16:00 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

Paul,>>>The stock market tends to look six months out, and in six months and two weeks, it will be 1999. Rather than fixating on Mr. Kurlak's personality, why not focus on the ideas? Stooping to personal attacks is non-productive (non value added). <<< Eric Savitz in next weeks Barron's writes: "Kurlak observes that Intel already has enough capacity to make more chips than the market requires, and that the company's transition this year to chips with thinner line widths will boost its potential capacity about 50%. Include new capacity from Advanced Micro Devices and other clone makers, Kurlak adds, and the total goes even higher. Intel, he concludes, faces the prospect of either laying off workers or starting a price war."<<< Dr. Paul Engel(MIT), former employee at Intel, tells us that this is not true. Going from a 0.35 micron process to a 0.25 micron will not boost capacity by 50%. If we think that Mr. Engel is more likely to be right, we find it difficult to go on to Kurlak's conclusion that Intel will lay off workers or start a price war? If this premise is wrong, what should we focus on? How can we take Kurlak's predictions about 1999 seriously when it is based on what appears to be a false premise? >>>I find that although he has oversimplified in parts of his analysis, there appears to be a significant probability that his forecast of a price cutting grab for market share could come to pass<<<. Okay, lets forget about the faulty premise and focus on the probability for a price cutting grab for market share in 1999. If the competition can execute perfectly, they could produce with the help of outsourcing enough to supply 30% of the low margin / low end market (for arguments sake we will accept that). So what? What happens then? And, what happens after that? Can the competition keep up with Intel R & D, manufacturing prowess, Slot 1 implementation, and Merced roll out in 1999? So, what is the bear case, exactly? I'm willing to listen. I'm not here to lose money. If you could help me not to lose money, please explain. Mary