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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Clarksterh who wrote (24450)	9/20/1998 12:08:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 70976

>> As Ford got more and more efficient at manufacturing cars, he dropped the prices without adding much in the way of extra features. His margins stayed about the same since the demand elasticity was such that even at lower per-car costs and sales price his total revenues still grew substantially. << This is exactly the model that the semiconductor industry usually follows. Productivity improvements make computers cheaper so more people buy them. We're in complete agreement there. The problem, short term, is that, as with Ford, we've fallen off the demand elasticity curve. The market has as much memory and as much computing power as it thinks it needs at current prices/profit margins. For the long term, yes, we can expect demand and supply to match and the win-win scenario of more powerful chips for less money and fat margins to return. That's why I'm long term bullish on the industry. The question at this point is when the short term demand shortage will work itself out. Katherine

To: Clarksterh who wrote (24450)	9/20/1998 8:19:00 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 70976

I like the discussion of where we are headed in terms of PC's in the home 40-50 years from now, but am disturbed that so few have the foresight to see other application for IC's. As an example, there is currently a 11 mile stretch of highway in CA which is wired underground with sensors so that cars with computer equipment can literally drive themselves. This means lane changing, exiting the highway etc. I am not sure of the IC content each car will require but have to assume it will at least equal that of the average $2000 PC. We are entering the first digital millenium with many(most) applications yet undiscovered. The PC merely whets our appetite for more things digital. BK