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

To: Ian@SI who wrote (29698)	4/25/1999 1:48:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 70976

Ian, Intel's lowering of 1999 expected Capex was done a while ago, I believe was mentioned in the January CC. They said back then that it was being lowered from 4 billion to 3 billion. In the recent April CC, they said 'it remained at 3 billion'. Obviously, then, April 13th, they know full well of 0.18, so 3 billion it is. My notes from the April 13 CC below. The reasons they gave in January for less spending were that they were able to reuse more equipment than had been expected. This dovetailed with their major cost management and reduction program. Message 8896099 To: Michael Gat (78905 ) From: Tony Viola Tuesday, Apr 13 1999 7:22PM ET Reply # of 79947 Michael, thread, some notes from the conference call. Andy Bryant and Paul Otellini spoke for Intel. Overall mood was positive, things are good, everything on or above plan. - First quarter results were all within previous guidance, including revenues being down by the amount they were from 4Q98. - Highlights from 1Q were strong Celeron demand, PIII ramp ahead of plan and PII meeting pent up demand left over from 4Q98. - Gross margins at 59% (high) helped a lot by continued cost control. I think Bryant said later that tight cost control would continue to be around for the foreseeable future. - Average manufacturing cost per microprocessor was below targets, also helped by tight cost control. - Microprocessor shipments slightly down in 1Q, again, seasonal. - 2Q would be flat to slightly down vs. 1Q, again, seasonal. - Capital spending budget for '99 remains as expected at 3 billion. - Segmentation is working as planned. PIII is ramping faster for Intel than any microprocessor in their history, and is ahead of plan. Also, Intel is pleased with the software support going toward PIII. PII and PIII Xeon volumes are growing, no percentages given. - Y2K - is Intel expecting any nuclear winter? No, capacity is being planned for normal seasonal growth for 2H. - Camino remains important to Intel on PIII, mentioned Rambus, but PIII is designed to support several chipset designs. >>>I have to wonder if INTC drafted that part of their annual report before or after they issued the orders to upgrade their fabs to 0.18µ capability.<<< Yes, they did, but Intel has had 0.18µ in the plan for this year since 1998, at least. The go-ahead doesn't change this year's Capex budget. You're hoping for more business for AMAT from Intel, but, unfortunately, it'll be as budgeted from 1/99 by Intel (unless something changes). Tony