Around the World - Intel: the skeptics wrong again?

<b>Around the World</b> - Intel: the skeptics wrong again?

Intel: skeptics

    again made a mistake?

(C) Alex Smal
(C) Computer Review
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   Leadership position of the semiconductor industry - 
companies Intel - seems unshakable, but about a year ago, 
forecasts Analysts were not for her bright and predicted the 
first decline this decade. But, nevertheless, the company could 
maintain its position and has recently even announced that it 
expects to increase annual sales by 8-10%. So due to what Intel 
also managed to stay afloat, and that it expects in the future?


   One of the most important steps the company has
transition year and a half ago to a new strategy, the essence 
of which - the division issued its products in several 
categories, such as processors for low-cost PC processors to 
mainstream PC processors for high-end corporate servers. Such 
an approach Intel due to the compensation of small gains from 
the entry-level processors (currently Celeron) significant 
revenue from sales of high-performance chips for desktops and 
servers, such as Pentium II Xeon, held for five quarters the 
average price of its products virtually unchanged at about

$ 210.

   However, some experts believe that
although, according to some estimates, the processors
Xeon class must this year to bring Intel order of $ 1.8 billion 
(approximately one-fifth of all profits) to make major

rely on them still quite risky. The problem here is in the world
economic crisis and the urgent need to correct a mistake in 
2000, due to which companies can refrain

1999 from bulk purchases of PCs top
level. Incidentally, it is believed that the first
factor may lead to further increase the demand for cheap 
computers, this case, Intel will have to seriously compete with 
companies such as AMD and National Semiconductor, in fact, for 
example, share of PC sales, with its processors cost less than 
$ 1000 in retail stores in the United States today is less than 
30%. True, the last steps Intel, in particular, the maximum 
depreciation of lower-level processors (Issue Celeron processor 
in Socket 370) indicate that the company does not intend to 
tolerate such a state of affairs. According to some reports in 
the last quarter of last year output Celeron was doubled and 
increased to 8,000,000 pieces, which exceeds that of all the 
competitors together combined. But while Intel will continue to 
pay due attention to the average sector, which today is Pentium

II. Last year, the share of sales of Pentium
II amounted to 56% of total revenue in
largely due to the fact that, for some
estimated that 97 out of 100 PCs costing more than
$ 1500 is equipped with these processors.

   No less ambitious plans and Intel, associated with the Xeon. 
In 1999, she plans provide a more rapid version of this

processor with clock speeds above
600 MHz and more inclusive cache L2, and thus continue to 
expand its influence in the market servers and workstations. To 
date, Intel is almost completely controls the processor market 
for servers costing up to $ 10,000 and is projected to by 2002 
it will belong to a large part of the processor market for 
servers worth up to $ 100000. One can not but

mention some of the planned Intel internal measures aimed, in 
particular all at lower costs. So, companies

already managed through the use of technology
videoconferencing to reduce travel expenses of its employees 
are planned staff reductions in 3000 people (to bring the 
number of employees up 61000). In addition, Intel is 
increasingly using e-commerce and shakes its customers to send 
orders via the Internet, which reduces the cost of their 
processing and increased productivity. These, as well as 
several other measures will enable the company estimated that 
savings in the current year about $ 45 million 

   However, further increasing incomes
Intel expects to achieve by reducing production costs. Say, the 
transition from 0.25 micron to 0.18-micron technology, which 
the company plans to implement in the next six months, will 
allow up to 75% more efficient use of silicon substrates, and 
thus significantly reduce the cost of ready-made CPUs.

And after upgrading to 0.18-micron
technology, the company will continue to use the 70% already 
have her equipment, ie, bulk purchase of new equipment is 
planned. 

   Intel is also a lot of attention is given to new promising 
markets such as Latin America and China (which, seems to have 
given up on AMD and National Semiconductor, focusing

on expanding its business in the U.S.).

   While Intel has obtained all (at
so it seems from the outside), and even her
shares after 32% fall in first half of last year, jumped to a 
mark - 115 points, reversing the predictions of skeptics to the 
effect that a collapse in prices on the PC will shallowing of 
money, "Rivers", flowing into the company. Maybe another 
prediction come true - about the fact that this year Net profit 
of the semiconductor giant reach a record 8.2 billion dollars 
in annual revenue 33 billion? 
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