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

To: Herschel Rubin who wrote (59270)	7/3/1998 8:40:00 AM
From: Francis Chow	Read Replies (4) \| Respond to of 186894

Comments from ThreadDwellers would be entertaining on why chip demand prediction skills seem to have been rather lacking . As Dan Quale once said, "All predictions are dangerous - particularly ones concerning the future . . ." On a more serious note, I think Intel always hopes for the best. They had hoped Slot 1 would catch on; they had hoped the sub $1000 (now sub $500 segment) would not catch on; they had hoped "Intel Inside" would keep the major boxmakers on board. Actually Intel's competitors should be very thankful that Intel is being somewhat mismanaged. If a company with Intel's resources was run by a Machiavelli like Bill Gates they wouldn't have a prayer.

To: Herschel Rubin who wrote (59270)	7/3/1998 12:18:00 PM
From: Edwin Slonim	Respond to of 186894

Predicting the demand is greatly complicated by the practice in the semiconductor industry to commit to firm orders, with no corresponding commitment by the customer. In other words customers (large ones who buy directly from Intel) can order chips, and cancel at any time before delivery without penalty. So adding up the orders in your book do not give you an accurate demand forecast, especially in a sector with a history of shortages and allocation of products to customers, i.e. delivering less than customers order. So over-ordering is common. Intel has price protection in place and the regular price cuts in an attempt to improve things, but it has never seemed to solve the problem. I once asked Andy Grove why Intel couldn't begin charging for cancellations, and he just said it had always been that way. Anyway, that is clearly part of the demand forecast problem.

To: Herschel Rubin who wrote (59270)	7/3/1998 6:04:00 PM
From: Francis Chow	Read Replies (1) \| Respond to of 186894

Comments from ThreadDwellers would be entertaining on why chip demand prediction skills seem to have been rather lacking Another 2 cents on this topic, as I mentioned some time ago on this thread, just-in-time inventories for the boxmakers will make Intel's inventory situation worse. It still takes a fair amount of time to go from silicon to a finished, packaged chip, yet the boxmakers want to hold less than one week inventory. So someone has to predict the demand a couple of months in advance and hold the inventory, and that someone will be Intel.