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To: Craig Freeman who wrote (27157)	6/7/1998 12:52:00 AM
From: Paul Engel	Read Replies (1) \| Respond to of 33344

Craig - Re: "Since it costs far less to make a new PII/450 at 0.25u than the original PII/233 at 0.35u, Intel's margins will depend more on their product mix than the price of any one chip. " You are exactly right. That was a very perceptive observation. Paul

To: Craig Freeman who wrote (27157)	6/7/1998 11:04:00 AM
From: Steve Porter	Read Replies (1) \| Respond to of 33344

Craig, Since it costs far less to make a new PII/450 at 0.25u than the original PII/233 at 0.35u, Intel's margins will depend more on their product mix than the price of any one chip. Yeah and the cost of the L2 cache is nearly doubled so the savings are gone. You have to remember Intel isn't only selling CPU cores now. They are selling cache ram too.. and they are buying that if I'm not mistaken. The original 233-pII had cheap cache compared to a 450Mhz-pII. In addition in about 3 months (if not sooner) a 450Mhz-pII will be cheaper than the 233pII was at intro. NOt a good sign for margins. Mencindo's (sp) die size will jump up thanks to the integration of 128K of L2 cache on the die. In addition to increasing the cost directly (more silicion), it will increase the defect rate. And while that is Intel's strength, they still have to throw away chips. If the defect ratio isn't very low on Mencindo Intel may drop that product all together and forego the sub-$1000 market in favour of margins. Mencindo will be a more expensive die, selling for less $$.. that doesn't make much sense. I predict that if Cyrix comes out with a Slot 1 chip before the end of the year (or very early next year), Intel will drop their low-end slot 1 stuff and let Cyrix have it. It will accomplish the same thing for Intel (moving people to Slot I) but it won't cost Intel a penny. At least that's what I would do if I was Intel. I would just try and push the envelope till my engineers die of a heart-attack or something ;-) Steve