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

To: Hippieslayer who wrote (9053)	7/1/1998 8:54:00 PM
From: Samuel R Orr	Read Replies (1) \| Respond to of 11555

Fugazi, One of the intellectual stalwarts of our government in years past(I think it was the Reagan administration), said it made no difference if America made silicon chips or potato(have I spelled that to Dan Quayle's satisfaction) chips. Don't disparage our foreign policy by making light of potato chips. There probably isn't a lot of margin in 180MHz or 200MHz microprocessors, but it's a way of both selling them and getting a five hundred buck PC out on the market. It can't all be bad. Besides, if you're right, that $5.00 IDTI stock price may become a reality. Look at Jackson, fretting about being perpetually long. Save your Confederate money boys, the south may rise again!

To: Hippieslayer who wrote (9053)	7/1/1998 11:26:00 PM
From: Rob S.	Respond to of 11555

The release appears to outline the plan to inroduce WC 1 products now and the WC 2 products latter - the WC 1 is not available in 225 or 240 Mhz versions. I don't think IDT will make much on the WC 1 parts because the price has dropped so much for 200 Mhz AMD and Cyrix parts which offer better performance and single unit street prices for WC 1s are around $50. The 180 Mhz flavor is realy low-end at this point. IDT is probably selling the 180 for around $38 and the 200 at around $42. It probably costs IDT about $30 just for the manufacturing cost, not including general overheads. Because they are producing so few parts right now the "incremental" profits are inconsequential. The WC operation will lose money until IDT starts producing at least 350,000 parts per quarter that sell for an ASP of $90. They could sell one million sub 240 Mhz WC 1s per quarter and it still wouldn't help the bottom line. The WC 2 should be a different story. For about the same cost to manufacture, (because of the small die size and similar packaging and testing costs), 240 and 266 Mhz versions should sell for about twice the price of the WC 1 or around $80-$85 to OEMs if uP prices don't deteriorate much further before the 4th quarter. If IDT comes out with only 225 Mhz and limited 240 Mhz speed grades, then the ASP (average selling price) is likely to be closer to $65 by my guesstimate - still enough to make a modest profit but not much to fuel a rocket.