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To: Paul Engel who wrote (69535)	12/7/1998 3:54:00 PM
From: Khris Vogel	Read Replies (1) \| Respond to of 186894

Harry - Re: "Section Charles Clough of ML stated that Intel announced a 40% cut in capital spending in the last couple of weeks. " The only thing I recall is several comments by Intel indicating they intend to REUSE 70% of existing process equipment in existing fabs as they transition to the next smaller process. Andy Bryant, who made these comments, was EMPHASIZING Intel's new focus on COST REDUCTIONS - NOT Expansion reduction. Thank you, Paul. That was my understanding, as well. I had already performed a search of news articles and press releases, trying to find anything that supported Clough's stmt., but didn't find anything in that regard.

To: Paul Engel who wrote (69535)	12/7/1998 6:53:00 PM
From: Harry Landsiedel	Read Replies (2) \| Respond to of 186894

Paul Engel et al. Re: Capital Spending. Thanx Paul and to everyone else who could not find any verification for Clough's statement. One possibility is that Clough was picking up on the previously announced reduction in 1998 capital spending ('tho doubt it was anything like 40%) partly due to the acquisition of the Digital fab. Also, I expect the earlier shift to .18 micron process plus reuse of equipment as you mentioned would put a damper on the very heavy cap spending growth over the past few years, but nobody has quantified this (that I know of). If history is a good guide, Intel will probably comment in the 4Q earnings announcement on a cap spending number for 1999. HL