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

To: Chris Carlson who wrote (71369)	1/13/1999 3:06:00 PM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Chris - Re: " What is the story with manufacturing capacity in relation to this tidbit? Does Intel have latent capacity that it can bring on-line? " Intel sold out for Q498 several months ago and in December they sold out for Q199. As far as "latent" capacity, Intel's Fab 18 in Israel - a 0.18 micron fab from the get-go - should roll into production as soon as Intel starts producing quantities of 0.18 micron parts - probably early in Q2 of this year. Conversion from 0.25 micron fbas to 0.18 micron fabs will allow Intel to increase capacity on certain chips that are shrunk from the 0.18 micron process. Other 0.18 micron chips will have on-chip L2 cache and may actually INCREASE in size despite the smaller geometries. All in all, I think this falls into Intel's game plan of keeping costs in line - actually REDUCING costs - while still increasing die production capacity during 1999. As an ace in the hole, Fab 16 - barely started before being mothballed last year - still exists in Fort Wort Texas. Restarting that may not occur until Intel commits to 300 mm wafer production, however. Paul

To: Chris Carlson who wrote (71369)	1/13/1999 7:12:00 PM
From: Jeff Fox	Respond to of 186894

Chris, re:"What is the story with manufacturing capacity in relation to this tidbit? Does Intel have latent capacity that it can bring on-line? Or is it simply a matter of building the fabs it has planned and rigging them for the most profitable market segments?" I'll try to field this if you forgive me... I think the answers to your post lie with the time horizon of the deviance from plan. The shorter the period the less Intel (or anyone) can do to adjust. Intel can do lots to adjust to changes a year or more out, but very little in the short term. It looks like Q4 PII demand popped up unexpectedly on a short term basis. In fact, Intel did the easiest thing - drew down inventories first. You could tell from Andy Bryant's comments that they came up short on this score, requiring build plan adjustments. Jeff