"Somewhat surprisingly, in spite of great first quarter earnings reports and glowing current quarter outlooks have investors more worried than ever about the next slump, and chip stocks fell late last month despite the optimistic news."


I think this comment has got it. The "stock market" does not yet know, or is not yet convinced, that the recovery in the chip market is sustainable beyond 6-9 months. Gradually, evidence and opinion is supporting the view that the recovery is sustainable well into 2005, if not beyond. That then leaves open the question whether Intel will ruin the the market by oversupplying and whether other companies will be carried away by the recovery and overbuild capacity. These are normal worries associated with every industry recovery. Gradually, the "stock market" will overcome the worry and then become over-enthusiastic - which might be a good time to sell.

TPS came out with their newsletter this morning.
Every stock in their "Ten Stocks" is semi/electronics related.

AMAT, COHU, ESST, IDTI, INVX, KEM, NUHC, NVLS, UTEK, VSEA.

UTEK top pick of the month.

AMD is on their list of recommendeds with a Goal of 28.

"Somewhat surprisingly, in spite of great first quarter earnings reports and glowing current quarter outlooks have investors more worried than ever about the next slump, and chip stocks fell late last month despite the optimistic news. Since peaking on April 5, the SOX has plummeted more than 14%. The index now trades at early-November 2003 levels, signaling to us that there is tremendous value to be found among many chip names. Our current buy list contains two-dozen semiconductor-related stocks..."

Taken from a posting by TGPTNDR on SI

The Battle in 64 bit Land: Merchant Chips on the Rise
http://www.realworldtech.com/page.cfm?ArticleID=RWT042704221446

coutesy of ixse on SI

HP four way 2.4GHz Opteron server en route
2.4GHz AMD Opt/ProLiant available end of October

http://www.theinquirer.net/?article=15697

New heat sink assembly for shuttle XBox developed for Prescott (left) vs. that used on Athlon 64 / Northwood (right).

http://www.watch.impress.co.jp/akiba/hotline/20040501/image/nsb23.html

This post taken from Dan SI

Modulus Video High Definition AVC Encoding System Wins Prestigious Broadcast Engineering Pick Hit Award At NAB 2004

EDIT Sorry if previously posted 28th April

http://lsilogic.com/news/product_news/2004_04_28.html

Cusomer ranking of AMD v Intel

The following taken from a post by Karl Mahlman on Yahoo


From the CircuitCity website. Desktop PCs by customer ranking.


HP Pavilion Desktop PC with AMD Athlon™ XP Processor 3200+
Brand/Model: HP A520N
Customer Rating: 4.9

HP Pavilion Desktop PC with AMD Athlon™ XP Processor 2800+
Brand/Model: HP A500N
New!
Customer Rating: 4.8

eMachines Desktop PC with AMD Athlon™ XP Processor 3000+
Brand/Model: EMA T3085
eMachines Desktop Computer Package
Customer Rating: 4.8

HP Pavilion Desktop PC with AMD Athlon™ XP Processor 3000+
Brand/Model: HP A510N
New!
Customer Rating: 4.8

eMachines Desktop PC with AMD Athlon™ XP Processor 3200+
Brand/Model: EMA T3265
Customer Rating: 4.6

Compaq Presario Desktop PC with AMD Athlon™ 64 Processor 3200+
Brand/Model: CPQ S6900NX
Customer Rating: 4.5

Compaq Presario Desktop PC with AMD Athlon™ XP Processor 3200+
Brand/Model: CPQ SR1050NX
New!
Customer Rating: 4.5

eMachines Desktop PC with Intel® Celeron® 2.8GHz Processor
Brand/Model: EMA T2885
Customer Rating: 4.4

HP Pavilion Desktop PC with AMD Athlon™ 64 Processor 3200+
Brand/Model: HP A530N
Customer Rating: 4.4

eMachines Desktop PC with AMD Athlon™ XP Processor 3000+
Brand/Model: EMA T3065
Customer Rating: 4.3

HP Media Center PC with Intel® Pentium® 4 Processor 3.4GHz with Hyper-Threading Technology
Brand/Model: HP M490N
Customer Rating: 4.2

HP Media Center Desktop PC with Intel® Pentium® 4 Processor 3GHz with Hyper-Threading Technology
Brand/Model: HP M470N
Customer Rating: 4.1

Sony VAIO® Digital Studio™ PC with Intel® Pentium® 4 Processor 2.8GHz with Hyper-Threading Technology
Brand/Model: SON PCVRS510
Customer Rating: 4.1

HP Pavilion Desktop PC with Intel® Pentium® 4 Processor 3Ghz with Hyper-Threading Technology
Brand/Model: HP A450N
Hewlett Packard Desktop Computer Package
Customer Rating: 4.1

Microsoft's Gates confirms no AMD Windows 64 until Q4
He'll show off old Longhorn again

http://www.neowin.net/comments.php?id=19644&category=main

EDIT This is the same story I psoted earlier from a different soruce. I am not sure that the Inquirer headline is entirely accurate. I do not see any "confirmation". I see that he will talk about 64 bit which has been scheduled for 4Q.

Info on 90 nano AMD leaks on web

http://www.theinquirer.net/?article=15707

Microsoft to demonstrate home PC of tomorrow

By Ina Fried
CNET News.com
May 3, 2004, 9:00 PM PT

SEATTLE--Microsoft Chairman Bill Gates plans on Tuesday to show his idea of the home PC of the future--

Such displays have become commonplace at this show. For several years, Microsoft and HP have been working on a business PC that combines computer and telephony functions.....Gates is also expected to show off a home version of the Tablet PC....Microsoft plans to distribute a revised preview edition of Longhorn. The company will formalize a number of changes it has made to its road map in recent weeks, including delaying Windows XP Service Pack 2 until later this summer and the beta version of Longhorn until early next year.....

Another hardware advance that Microsoft is likely to discuss is the emergence of 64-bit chips from AMD and Intel for the desktop PC market.

The 64-bit PC is seen by some as more processing capacity than most people need, but Microsoft plans to make the case that the machines are an idea whose time has come, with gaming likely to be among the first markets to benefit from the increased power..............


http://zdnet.com.com/2100-1104_2-5204825.html

Thanks to Saxplayer for pointing this out.

jhalda: Thanks very thought-provoking. In general, I think the "AMD is green" would work very well in the old western european countries in the EU (not so well in the newcomers from the former eastern bloc) and probably not very well in Asia. I would have thought that price would be a big factor in all countries, especially if linked to equal or superior performance.

A question on benchmarks. The EU has ruled that clock-rates cannot be used as procurement criteria but benchmarks can. Whose benchmarks are most likely to be consulted by IT managers?

Or put it another way - which benchmarks will most influence a buying decision?

HP Compaq nx9105 Business Notebook uses 1.6GHz 256K L2 (Paris core) Athlon XP-M 3000+ (1.6GHz)

EDIT refers to "new Paris cores" - would Doug agree?

http://www.ocworkbench.com/ocwbcgi/newspro/viewnews.cgi?newsid1083602795,93709,

2Q goodies

......."Conclusion
Q2 is a decent quarter for new products. Intel's new chipsets and processors get released shortly, AMD releases new CPUs on its new Socket, VIA and NVIDIA release chipsets to support it and SiS get busy with PCI Express for their AMD and Intel lineups.

The Socket 939 wait is probably the biggest for the enthusiast. Unless Grantsdale raises the performance bar above Canterwood by a decent margin and Prescott on LGA775 turns out to overclock like a champion, with less heat than the Socket 478 versions, AMD should have the enthusiast market sown up for a little while longer.

Prices should fall on existing Socket 754 processors, letting more people get in on the AMD64 act, driving acceptance. Microsoft's continual delays for the release of Windows XP for the ISA, due to Intel dragging their heels on their own compatible processor releases, don't help, but strong 32-bit performance is a continual saviour.

Q2 is a fine time to be a computing enthusiast, new toys get released very soon and reviews are just around the corner.

My own personal choice for a high end computing platform in Q2 sits with Athlon 64, K8T800 Pro and Socket 939 processors. The only thing that would change my mind is a fair gap in performance between a current AGP graphics card and its PCI Express counterpart, making the Intel side of things look more attractive. Although PCI Express will be supported on AMD64 in short order, with K8T890 arriving at retail in Q3."

http://www.hexus.net/content/reviews/review.php?dXJsX3Jldmlld19JRD03NTYmdXJsX3Bh Z2U9Nw==

Thanks to Saxplayer

AMD Tops Intel in Spring Desktop Sales
http://www.pcworld.com/news/article/0,aid,115968,00.asp

Lisa DiCarlo (of Forbes now?) on AMD and Dell
http://www.forbes.com/technology/enterprisetech/2004/05/03/c...

Both from DRBES (with an E)

And from me

Intel, AMD market share remains stable
EDIT: Some further analysis of the figures and some reference to graphic cards.
http://news.com.com/2100-1006_3-52051

avtar: Not everyone is registered with that site and I think the data and analyst comments are worth publishing in full.

Flash-memory lags in growing chip sales for March
By Mark LaPedus
Silicon Strategies
05/03/2004, 12:22 PM ET


PORTLAND--Worldwide chip sales for March were propelled by growth in analog, digital signal processors (DSPs), and microprocessors, but flash-memory lagged the field, according to a new report from Pacific Crest Securities Inc. on Monday (May 3).

As reported on Monday, the three-month average of global semiconductor sales in March was US$ 16.275 billion, according to numbers published by the European Semiconductor Industry Association (ESIA), which cited statistics from the World Semiconductor Trade Statistics (WSTS) organization.

The figure exceeded analysts' expectations and was up 4.4 percent versus the previous month. This results in an increase of 32.3 percent versus the same month in 2003 (see May 3 story).

Global sales grew to $48.8 billion in the first quarter of 2004, compared to $36.4 billion in the first quarter of 2003 and $48.1 billion in the fourth quarter of 2003, according to the Semiconductor Industry Association (SIA).

The SIA noted that the first quarter is normally a seasonally weak quarter for semiconductor sales while the fourth quarter is normally a strong quarter. "The strong sales in the first quarter are very encouraging," said SIA President George Scalise, in a statement.

"Based on the strong first-quarter results, it now appears likely that growth for 2004 will exceed 20 percent," he said. "One of the leading drivers of sales growth was continued growth in corporate spending on information technology (IT) products. Corporate spending on IT software and hardware increased by 11.5 percent in the first quarter, the fourth successive quarter of strong growth and the third straight quarter of double-digit growth," he said.

Overall, unit shipments were flat for Q1, which bodes well for the industry. "We believe that flat IC unit shipments in Q1 suggests that the semi industry is off to a good start," according to a report from RBC Capital Markets in San Francisco.

"We believe IC unit volumes could grow 16-20 percent in 2004, well above the 10-year historical average of 10 percent. For the past two years, we have seen IC volume growth of 14-15 percent," according to RBC. "Based on this projection, we think the industry may reach tight capacity this year and IC and non-IC ASPs to trend up in the year."

Product demand was mixed for March, however. "In aggregate, March monthly sales tracked in line with historical patterns and were characterized by broad-based strength, with high-performance analog, digital signal processor and microprocessor segments posting strong revenues," said Michael McConnell, an analyst with Pacific Crest, an investment banking firm in Portland.

The flash-memory segment was the laggard of the group, with average-selling-price erosion partially offsetting growth in unit volumes," he said in a report.

On a month-to-month basis, flash-memory revenues were up 3 percent in March over February, unit sales grew 6 percent, and average selling prices were down 2 percent, according to Pacific Crest Securities. Compared to a year ago, flash-memory revenues were up 70 percent, unit sales grew 55 percent, and average selling prices were up 10 percent, according to the firm.

Flash ASPs were down for the third consecutive month despite long lead times for products. Lead times for NOR devices are 10 to 12 weeks, while NAND is running at 14 weeks, according to the firm.

"Based on March WSTS data, we estimate NAND flash bit shipments were ~9,600TB, up 28 percent q/q," according to RBC. "Although still early, we remain comfortable with our industry bit shipment forecast of 62,070TB in 2004."

On a month-to-month basis, microprocessor revenues were up 5.3 percent in March, unit sales grew 0.4 percent, and average selling prices were up 3.8 percent, according to Pacific Crest Securities. Compared to a year ago, microprocessor revenues were up 21 percent, unit sales grew 16 percent, and average selling prices were up 2 percent, according to the firm.

Microprocessor sales rebounded after a two-month lull, "due to a seasonal inventory hang, more specifically with notebook PCs," according to Pacific Crest.

On a month-to-month basis, DSP revenues were up 5 percent, unit sales grew 6 percent, and average selling prices were down 1 percent, according to Pacific Crest Securities. Compared to a year ago, DSP revenues were up 19 percent, unit sales grew 39 percent, and average selling prices were down 9 percent, according to the firm.

DSP demand continues to grow amid the wireless boom. ASPs are firming, as prices dropped 14 percent last month.

On a month-to-month basis, high-performance analog revenues were up 6 percent, unit sales grew 4 percent, and average selling prices were up 2 percent, according to Pacific Crest Securities. Compared to a year ago, analog revenues were up 25 percent, unit sales grew 27 percent, and average selling prices were down 2 percent, according to the firm

SIA sales data help buoy semiconductor sector

By Chris Kraeuter
Last Updated: 5/3/2004 11:12:19 AM



SAN FRANCISCO (CBS.MW) -- Chip stocks started out Monday with notable gains, helped by new data showing strong semiconductor sales across the industry during the first quarter...........

The Semiconductor Industry Association said global chip sales rose 1.4 percent to $48.8 billion in the first quarter. Sales in March rose to $15.58 billion, up 4.4 percent from February.

SIA President George Scalise said the first-quarter data indicate sales growth in 2004 should be better than the 19 percent that the industry group predicted in February.

"The fundamentals are in place for continued robust growth in chip sales through the end of the year," said Scalise, according to a statement. He cited spending by corporations on technology as a major driver of sales.


http://www.investors.com/breakingnews.asp?journalid=20995923&brk=1

Silicon foundries surge but fabless vendors fret
By Mike Clendenin
EE Times
05/03/2004, 9:59 AM ET

Taipei, Taiwan -- Asian foundries are running flat out to keep up with strong demand, and with orders looking good for the current quarter, small fabless companies should gird for a Darwinian struggle to lock in wafer supply.

The three top Asian foundries -- TSMC, UMC and Chartered -- last week turned in profits that were, respectively, up, up and surprisingly existent, as Chartered Semiconductor Manufacturing Ltd. reported its first profitable quarter in three years.

More good news is expected when results for the current quarter are reported. United Microelectronics Corp., Chartered and Semiconductor Manufacturing International Corp. (Shanghai, China) all said sales would be flat or up slightly. Much the same was expected from Taiwan Semiconductor Manufacturing Co. Ltd., which did not offer guidance by press time.


Because most of the foundries are running at full capacity, with the exception of Chartered, at 81 percent, executives predicted that higher sales would be derived from moderate capacity additions and higher average selling prices. The latter will probably mean price hikes for some technologies.

Now the bad news. Startups that scraped through the downturn are beginning to feel the double-edged sword of good times. In early April, a handful of fabless companies complained that lead times ranged from four months to more than six months in the extreme.

"The worst thing for a small company that survived the worst downturn in the history of the industry is to not have product to ship," said the chief operating officer of one small California-based fabless company that supplies storage devices.

While the industry still has capacity on trailing-edge 0.25-micron, 0.35-micron and larger lines that were in place when the downturn hit at the end of 2000, underinvestment in leading-edge capacity " for 0.18-micron, 0.13-micron and, soon, 90-nanometer design rules " is being blamed for today's capacity crunch.

Even in Asia, where connections are coveted, fabless companies with strategic ties to foundries " such as DVD IC maker Mediatek Inc., which has an arrangement with UMC " are having to look elsewhere to get all the capacity they need.

"This year is particularly challenging, not only for small fabless companies but also for the large ones," said Jeremy Wang, Asia-Pacific director of the Fabless Semiconductor Association. "Foundry lead times are suffering a few weeks, but that is still acceptable. A key factor in longer delays will be back-end testing and packaging capacity; that is a big concern."

It's the familiar story of an upturn in action " of the boom-time shortages that lead to frenzied buildouts and, eventually, the specter of oversupply. All the major foundries are waving dollar bills at equipment makers. TSMC is spending $2 billion; UMC has $2.1 billion; Chartered's budget is $700 million; and SMIC has set aside $1.9 billion, of which $800 million will be spent this quarter.

'A bit delayed'

Still, it seems equipment makers can't hustle their gear out the door fast enough. SMIC said that its 300-mm wafer fab in Beijing will be delayed because of longer equipment lead times. "The facility is on schedule, the clean room is on schedule, but the manufacturing equipment is . . . a little bit delayed, probably four to six weeks," said president and chief executive officer Richard Chang. "We will do our best to catch up."

Last year, SMIC was targeted by competitor TSMC as the bogeyman of the next downturn because of its aggressive ramp-up schedule. Yet all the foundries are pouring it on as fast as they can, especially TSMC, which said last month that it would boost capacity of mature technologies.

That's spurring analysts to ponder just how far away the next downturn may be. In an April report, IC Insights Inc. president Bill McClean noted: "Since 1978, the worldwide semiconductor market has never grown more than 8 percent in the year following a year when worldwide semiconductor industry capital spending increased greater than 50 percent."

McClean estimates that this year's capital expenditure growth will hit 53 percent. He is forecasting a 5 percent decrease in the semiconductor market next year.

That's hardly a bust, but it's also a sign that the go-go days of early 2000 remain elusive.

" David Lammers in Austin, Texas, and Peter Clarke in London contributed to this story.

http://www.siliconstrategies.com/login.jhtml?_requestid=401225

More Dell-AMD speculation

This is a long article on Dell's competitive position vis-a-vis HP

..................."The company could have a few tricks up its sleeve, however. For one, Advanced Micro Devices CEO Hector de Ruiz thinks Dell is going to see the light inevitably and support AMD's Opteron processors. HP, IBM and Sun are already on board, and Dell is now the lone major vendor to shut out the 64-bit technology. "Dell will do what a great company always does," Ruiz said late last month on the first anniversary of the Opteron. "It listens to its customers. I believe Dell will be here when we have our two-year anniversary of Opteron.

That might be news to Dell, but it certainly makes sense. Not only would customers get more choice, but the competition between Intel and AMD for Dell's business could drive down prices, thereby giving Dell better margins.".................




http://www.eweek.com/article2/0,1759,1583261,00.asp


Thanks to Saxplayer

StarNet Launches X-Win64, Industry's First 64-Bit PC X Server for Opteron Systems

SUNNYVALE, Calif., May 3 /PRNewswire/ -- StarNet


http://tinyurl.com/35y93

Global Chip Sales Recovery Accelerates in March
Mon May 3, 5:33 AM ET
Reuters

FRANKFURT (Reuters) - Global sales of chips continued to accelerate in March, rising 32.3 percent year-on-year, as producers of communication devices and computers fueled demand for semiconductors, a European trade association said on Monday.

The data also point to a wider strengthening of the technology sector, indicating that manufacturers are boosting production to satisfy the demand for new mobile phones, digital cameras and personal computers.

Sales in March rose to $16.275 billion, up 4.4 percent from the previous month, said the European Semiconductor Industry Association (ESIA), citing statistics from the World Semiconductor Trade Statistics (WSTS).

WSTS provides a thee-month average sales figure to flatten out single-month bumps.
From an application point of view the main driving products were communication (wireless as well as wired), and PC-related products. But also automotive performed better than the rest of the market," ESIA said.

The association said the continuing sales rise in March and the increase so far this year make a 25-percent full-year growth "more and more likely."

The semiconductor industry had suffered its worst-ever downturn in the last several years, but is finally seeing a strong growth in demand from its main clients, pushing producers to finally start boosting capacity.

In March, the number of units sold jumped by 21 percent and average selling prices rose by nine percent, ESIA said.
________________________
From Jack at Yahoo

Some positives from the street.

Diggins, Manager of Chespeake Core Growth as reported on street.com this morning. Cautionary about tech but likes AMD.

"There will be valuation compression because interest rates are going higher, and the sectors with the highest multiples are going to compress the most," said Diggins, whose fund owns only a handful of names in the tech space, including Dell, EMC Qualcomm and Advanced Micro Devices.


and

DRBES SI

Guys, we are in deep DOO DOO, Schwabface has just upgraded AMD to "A" STRONG BUY ; and intC is rated "B" sucky BUY. We should see AMD at $10/share within a week.

The significance of the new procurement directions in the EU is that every level of the public sector - from the governments of municipalities, regions and nations, as well as all the inter-government agencies, will have the opportunity to buy from AMD. This includes all research institutes, universities and schools which receive government funds - and almost all do in Europe. With the recent extension of the EU by a further ten counties this means that we are talking of an aggregate public sector serving some 350 million people. If you consider the UK alone, with its massive public health services, welfare system and armed forces, you begin to get an idea of the scope of the market. It is now open to AMD for the first time.

(AMD is strong in Europe but in the private sector).

Some have asked when will it begin.

The fact is that it is already Euroepan law. The recent directives are correctives, warning authorities that they are not in compliance with the law if they continue to specify Intel and use clock rates as a criteria. So the effect is immediate. Purchasing departments will not delay implementation. It would be illegal and would be a sackable offence.

The French have already been preceded by the Scandanavian countries and will soon be followed by the Italians and Spanish and by all the others.

This change has been brought about as the result of a number of converging forces. Among them is AMD's complaints to the Commission that Intel is guilty of unfair business practices. That is a separate issue. The Commission is considering its response. But it is will be very difficult for the Commision to distinguish between illegitimate business practices and marketing. It is much easier for the Commission to ensure that its member states observe European law with respect to procurement.

I am pretty sure that the Commission was also alerted by IT specialists in the various countries who want to buy AMD but cannot because of the criteria.

Behind all this is the European Commission's aim to prevent American companies getting a headlock on any vital industry. Americans have been gouging Europeans for too long. (Remember when Nixon tried to prevent the French-UK Concorde from flying into the US after the US's own attempt at building a similar aircraft was shelved?). In the case of semiconductors - the EU wants to foster home-grown products, employ European scientists and engineers and stimulate regional economic growth. To this end it provides grants, loans and loan-guarantees. The grants themselves have to conform to pan-European standards - no single country can give grants to its own industries to take unfair advantage of the industries of other European countries.

One of the companies that has received this kind of money after suitable scrutiny by the Commission is a subsdiary of AMD in Saxony, Germany. It would be contradictory for the EU to finance such developments and then allow procurement criteria to close the door on the products.

The Secret Market Contender: White-Box PCs

By David Halperin
www.TechNewsWorld.com,
Part of the ECT News Network
05/01/04 1:30 AM PT

In an industry marked more than any other by rapid obsolescence, vendors holding low inventory -- and not tied to public perception of established product lines -- can adopt innovations more quickly than some of their larger competitors.

In some ways, the computer business is a bit like show business. There are stars that become household names -- names to conjure with. But for every one of them, there are dozens of workaday actors who may deliver perfectly credible performances but remain largely anonymous.

Something similar goes on with personal computers. Everybody knows Dell (Nasdaq: DELL) -- currently the Tom Cruise of the business with about 30 percent of the desktop PC market. Hewlett-Packard is almost as much a household name, especially with its current run of imaginative TV ads. Gateway became well known for its sales model, and Apple (Nasdaq: AAPL) has a public profile far out of proportion to its current market share.

But between one-fourth and one-third of all desktop PCs currently shipping come from generic "white box" assemblers and resellers. White-box manufacturers have chosen to trade the glamour of a high profile -- with its high marketing and distribution costs -- for the nuts and bolts of commodity computing.

Research firm IDC regularly publishes reports analyzing the white-box market, and the most recent one suggests that white-box market share in the PC sector is around 28 to 30 percent. The first question to ask when considering white-box market share is, not surprisingly, the following one: How do we know? After all, this market segment is by definition fragmented, local and diverse.

IDC senior analyst David Daoud, co-author of the most recent report, explains that white-box market share is determined by a process of elimination. Every computer needs a processor, and, he says: "Intel and AMD together hold a 99 percent share of the processor business. And you know the shipments of the top 20 branded companies. It's safe to assume that the rest is white box. There's a merchant market as well, that you have to take into account."

Elsewhere -- particulary in Asia and some other "emerging markets" -- white-box computers account for much higher percentages.

There are several good reasons for manufacturers to choose this route. White-box computer makers range from a local shop-front operation that custom-builds individual machines to companies like Systemax, which -- with its claims of 40,000 products and 2 million customers -- might be edging out of the white-box category into the branded space.

Especially while they're relatively small, white-box makers enjoy many of the advantages traditionally associated with smaller enterprises of all kinds, including agility, adaptability, flexibility and proximity to customers.

In an industry marked more than any other by rapid obsolescence, vendors holding low inventory -- and not tied to public perception of established product lines -- can adopt innovations more quickly than some of their larger competitors. They can offer a greater range of customized solutions, and they often can offer customer support at a more local level than national or multinational companies.

Fluid Markets

At the same time, white-box makers are often better placed to take advantage of the fluid nature of the international components market, with its opportunities for picking up spot deals on discounted products. Who buys white-box computers, and why? Relatively recent estimates have shown the home-user market taking up almost 40 percent of the output, with small and medium business claiming about another 38 percent. Education and government have tended to make up the balance.

The reasons for this are varied and sometimes surprising. Yes, white-box machines are usually cheaper, by at least 10 percent, than their big-name rivals. But many buyers prefer to stick to what they see as the implicit quality of major-name products and the stability of the companies that make them.

But others point out that white-box manufacturers generally use the same tried-and-true components as their bigger competitors --and that when it comes to service and support, local is best.

When asked about the question of support, IDC's Daoud points out that "small organizations really count on the local assembler to be their main support. And what I hear from consumers is that anyone who buys a system from any vendor ends up complaining about the quality of tech support. I don't think there is such a thing as 100 percent excellence in this area, with one exception, and that is eMachines."

While the current outlook seems positive, things have not always been sunny for white-box vendors. The IT industry's 21st-century hard times have meant both consolidation at the big end of town (think HP (NYSE: HPQ) and Compaq) and aggressive price-cutting and commoditization (think Dell). This squeezed white-box makers, but it also alarmed major component makers that didn't want to be in thrall to such a small number of huge customers.
As a result, they began to offer special cost-lowering programs and partnerships aimed at the independent market. "The company that led that first clearly was Intel, I think in conjunction with Microsoft (Nasdaq: MSFT) ," Daoud said. "Very quickly, everybody else followed: Seagate, Maxtor, software makers, all the way to component distributors."

At the same time, he said, white-box makers began to organize themselves into a formidable interest group, now known as NASBA -- the Association of Channel Resellers.

But the desktop PC market is, to a large degree, steady and saturated. The next frontier, in the opinion of many commentators, is the portable-computing market. "For the white-box guys, the problem is that they don't have a brand presence, and they're having a hard time getting into their client base mainly due to quality-assurance issues," said Daoud.

"What they need to do is to rely heavily on an outsourcing element, by which I mean getting Intel to back their presence and to supply them with a program that's similar to what Intel does in the server business," he added. "That is, you can buy a server from Intel as a kit, you assemble it and put your logo there, and you say 'backed by Intel.' Your clients would feel very good about that. The challenge is how to duplicate this model in the laptop business."



http://www.ecommercetimes.com/perl/story/hardware/33596.html

Thanks to amddj Yahoo.

This article mainly is about the meagre scope for added value in servers. But interesting reference to the market strength in servers and the impact of 64 bit.


MIC sees price war straining server profits

2004-05-01 / Taiwan News, Staff Reporter / By Marie Feliciano

The intense price war among value-line servers - powerful computers that are at the heart of corporate networks - continues to squeeze Taiwanese vendors' profit margins, a Taipei-based industry tracker said yesterday.

"In response, Taiwanese makers have been working on shipping servers at higher levels of assembly. Recently, blade servers, with their high market potential and strong backing from major vendors such as IBM and HP, have become a focus of research and development for Taiwanese makers," the Market Intelligence Center said.

Software and service, however, were critical to the server market, limiting the added value of hardware, MIC continued. In terms of market scale, the server industry could also not compare with the PC trade.

Hence, despite higher profit margins, "overall profitability is difficult to achieve given (their) heavy investment into R&D," MIC said.

In its latest report, MIC said Taiwanese server industry shipment volume in the first quarter of 2004 grew 22.7 percent year-on-year to 503,000 units. Compared with the last quarter of 2003, however, this translated to only 1.2 percent in sequential growth, it added.

"Although the global economy has returned to form and corporate willingness to boost investment has increased, insufficient corporate confidence stymied equipment procurement," MIC explained.

"Shipment value grew 22.7 percent year-on-year to US$438 million, but witnessed a slight sequential drop due to a drop in full system share."

The research house was more bullish on the industry's prospects in the second quarter.

A global economic upswing, bolstered by a revival in capital investment and bigger procurement orders, would provide Taiwan's server industry a momentum for growth, MIC said.

The industry tracker forecasted server shipment volume to reach 542,000 units in the second quarter, up 23.2 percent compared with year-ago figures and up 7.7 percent sequentially.

"The growing prevalence of 64-bit processors in value-line servers (is) another development to watch in the second quarter of 2004. After AMD released its 64-bit CPU Operton, Intel will be rolling out the Nocona in the second quarter, a Xeon-based, dual-CPU that is forward compatible with 64-bit computing," MIC said.

http://www.etaiwannews.com/Business/2004/05/01/1083385602.htm

Thanks to amddj Yahoo

tecate: Because the Inquirer is critical of Intel does not mean it lies - on the contrary.

Price gouing sounds about right to me. American companies are always gouging Europeans. In the UK people have taken to hiring charters to places like Portland, Maine to do shopping. Even with the cost of the flights and duty paid at customs there is still a big saving. It is across the board - from shoes, jeans, electronics, automobiles (although the latter are shipped by sea!).

Gifts for geeks. AMD tech items.
I collected the following from saxplayer on Yahoo.

Dual-Core Opteron Details (AMD)
By Brian Neal
http://www.aceshardware.com/read_news.jsp?id=80000477


Check out their listings for Athlon64s. Looks like some good stuff in the near future:
http://www.digicomgroup.com/products.htm



HyperTransport "the K8T800 Pro" loading mother appearance of 1GHz

http://tinyurl.com/2aokt

France and Intel - the original French text
http://www.theinquirer.net/?article=15649

and

the Inquirer exposes Dell's price gouging in Europe

http://www.theinquirer.net/?article=15646

Both thanks to DRBES at SI

Barrons article on the current valuation of Intel, IBM, Microsoft and Cisco.

TECHNOLOGY TRADER
By BILL ALPERT


Handicapping the Four Horsemen

FOUR STOCKS DOMINATE TECHNOLOGY PORTFOLIOS: Microsoft, Intel, Cisco and IBM.

The stock-market value of these four firms adds up to a combined $760 billion, which represents 35% of the entire tech universe's market cap. But one of the four stocks looks expensive, say the tech analysts at Sanford C. Bernstein. It's Cisco.

The big networker's stock trades as if its next decade's earnings will grow much faster than the other three tech giants. Faster, in fact, than Cisco has grown in the last few years. When a stock looks expensive compared to its history, it tends to underperform, warned the Bernstein analysts in a Thursday note to their clients. The prices of Microsoft and Intel, by contrast, seem to underestimate those companies' prospects.

"It looks like there's a disconnect there -- particularly with Cisco and Microsoft," says one of the authors of the Bernstein report, semiconductor analyst Adam S. Parker.

Every stock price implies investors' expectations of future earnings growth. The Bernstein bunch estimated the implied growth in each stock, using a formula that considers the stock's price, the earnings forecast and other factors such as how its earnings-growth trajectory compares to other firms' growth.

At Wednesday's 22.37, Cisco's share price implies earnings growth of 15%, over the next 10 years. That is the same expectation that investors had of the company back in the 1990s, when Cisco was growing as few companies have ever grown. But Cisco is big now, especially in comparison to its maturing market for network gear. Earnings grew 4% annually over the last four years (not counting one-time events). The shares may have near-term momentum, but their fair value is 14, Bernstein concludes.

Microsoft, Intel and IBM all trade at prices that imply their annual earnings will grow at rates of 10% or less, for the next decade. That is a stingy view of Microsoft, say the Bernstein analysts. The software firm has grown earnings 11% a year, since 1988, yet its 26.56 share price implies 8% future growth. Investors don't appreciate Microsoft's already-booked software deals. The current recovery in corporate computer spending benefits Microsoft, as its high-margin systems software goes along with new-computer purchases. Microsoft shares could rise to 32.50, says the Bernstein report.

Intel's shares have slid this year, to a recent 26.35. By the Bernstein calculus, that price implies a future rate of earnings growth of 8%, which is about what the chip maker has delivered historically. But semiconductor analyst Parker thinks the revival in PC demand, and improved manufacturing technologies, will expand Intel's sales and gross margins. That would get Intel a fatter earnings multiple, says Parker, and conceivably a $42 stock.b

Since IBM's restructuring in 1995, the computer maker has delivered just 7% earnings per share growth -- and some of that growth came from pension income and patent royalties. The Wednesday share price of 90.41 implies future earnings growth of 8%. That seems about right, according to the Bernstein analysis, which sets a target of 95 for the stock.

At Tuesday's annual meeting, IBM's board voted to raise the common-stock dividend by 13%, to an annual level of 72 cents a share. Although it was IBM's biggest dividend boost in seven years, the yield on the stock price is still just 0.8%. Big Blue spends more of its cash flow on share repurchases. Last year, it paid out $1.1 billion in cash dividends and bought back $4.4 billion worth of stock. Buybacks raise a company's earnings per share. As long as tech stocks have decent multiples, tech investors probably prefer that an IBM or Microsoft apply its cash toward share repurchases, rather than dividends.

As for all those Cisco shares in investors' hands, the Bernstein analysts suggest investors apply some of those toward share purchases of Microsoft.

sgolds. Look at the (almost identical) pattern in December -exceeding the Bollinger Bands after a sustained price movement shows that price movement went too far, too fast. A correction (upwards, in this case) is due.

That's what I meant to say!

What are the Bollinger Bands trying to tell us - poor dumb creatures!

The shape is now that of a distended colon. The little black thingies have moved from outside the upper band to outside the lower band, so I suppose that means they will now move to the middle of the band - or $15.75

http://139.142.147.218/StockChart_ImageOnly.dll?cus=0&co=ask&i_chart=0&inm=5&ind=2&a...

IBM introduces new servers including one 64-bit

http://www.aceshardware.com/read_news.jsp?id=80000476


Germany and Spain to follow France in banning explicit reference to Intel and clock rates in public sector procurement policies.

http://www.amdzone.com/modules.php?op=modload&name=News&file=article&sid=426

(Had to fit this one in here because my 18 free posts are up for the day.)

AMD Formerly Recognises Tyan as Solution Provider

http://www.amdzone.com/modules.php?op=modload&name=News&file=article&sid=424

Sun's Opteron box defies European power supply standards
By Ashlee Vance in Chicago
Published Friday 30th April 2004 22:51 GMT

Sun Microsystems has admitted to a problem with one model of its Opteron-based V20z server that, according to a source, is causing shipment delays.

Sun's v20z system with the Opteron Model 248 processor apparently runs too hot to meet some regional regulations governing electro magnetic interference, of all things. The problem revolves around the power supply units Sun has been shipping with the server.......................


http://www.theregister.co.uk/2004/04/30/sun_opteron_delays/

bobs10: I think I'll wait until I see some more evidence of a bottom before I jump in.

You will recognise it when you see it. Bottoms are usually roundish, or pear-shaped, with two equal (more or less) hemispheres, which, in classical TA theory, we call "cheeks". In advanced TA we sometimes distinguish between wobbly cheeks and firm cheeks. The division, or "crack", between the cheeks is sometimes referred to as a "bottomless void", which always seemed to me to be a contradiction in terms, although I once met a bottomless Abess in the priory near where I live.

Not too sure about your idea of "jumping in". Avoid the temptation to try to bounce off the bottom. But when you see the bottom, spank it hard.

Keith: Give over! Stop asking rhetorical questions about the meaning of meaning. I suspect that nobody else is as interested in parsing words as you are. I have seen well informed people on other boards define pilot samples, or whatever the phrase is, as the same as products. Whether they are or not does not concern me. I believe Rivet was correct when he said, essentially, that 90 nm would start in 1st week in April, and I believe Ruiz in the second week when he said 90 nm has started and is producing good power and yield results and will be in production mode in a few weeks. The fact is you are wrong. 90nm will be produced for revenue in 3Q (at the latest).

Keith: Don't patronise, else I will report you to the Moderator. Oops you are the Moderator!

You didn't help at all. In my view, you simply reacted to a fall in the stock price by trying to blame AMD. I remember a post of yours a few months back in which you said you had planned earlier last year to sell your AMD holding in 2Q 2004. If you have not done so, perhaps that would explain your reaction. Come to think of it, it would explain your reaction if you did sell.

I am not concerned that you have a reaction. I am simply pointing out that your thesis that AMD is slipping behind its road maps in a significant way is nonsense.

I also think your use of the phrase "mass production" as a different category from "shipping for revenue" is an attempt to wriggle out of the hole you dug for yourself when you predicted and continue to insist that AMD will not ship 90 nm in Q3. AMD will ship for revenue in Q3, if not before, and you will claim that it is not "mass". So Keith "no mas", as they say here in Mexico.

Keith: You can have the last say since you also had the first. I stand by all my comments.

...France has taken steps toward complying with European Union law by warning local government buyers not to favour computers with Intel....

http://www.forbes.com/business/manufacturing/newswire/2004/0...

Thanks to DRBES on SI. But the link is broken so another to the same story below!

And may I add I told you so! The EU loves regulations, especially if they prevent American industrial hegemonies from developing. And France more than any other!

http://cbs.marketwatch.com/tools/quotes/newsarticle.asp?siteid=mktw&sid=373&guid =%7B601B5EE5%2DC130%2D4C22%2D872D%2D4C0EA5DBF8A9%7D&symb=

There is criticism on AMD boards of Hector Ruiz's recent statements "trashing the competition", "insulting potential customers" and making "inflated boasts" about AMD technology. He is said to be becoming more like Jerry Sanders and major institutions (God love them) don't like that.

Actually it was Jerry Sanders who said with reference to HT and Intel "we've got 'em" when he intervened in Hector Ruiz's remarks yesterday.

And it turns out that the first reports of Hector Ruiz's statements about Michale Dell being a "dead last", were partially written notes of what he actually said. He had tried to lighten the reference by talking of "dead last" as being in the "caboose" of the train.

In context, his praise of Michael Dell was fullsome, and he claimed a close working relationship with him, more than with the CEO of any other OEM. And he was answering questions about why Dell had not come aboard and he tried to give a reason when he mentioned that Dell had a $5 billion commitment to Intel. He spoke about the Dell commitment to Intel as though it was well known and not in a way that he was disclosing a personal confidence. I suppose the Dell commitment is very well known among inner circles and Hector Ruiz did us a favour by passing on information that investors and analysts should have and which does explain the anomaly of Dell's isolated position.

As for making exaggerated claims about AMD's technology - so far it has been all understatement both with regards to delivery time and potential.

I thought his choice of word "humungous" to describe the expected improvements in flash margins in 2H 2004, to be surprising and probably not wise.

But if we want the Chairman and CEO to go out and increase mind share we should be tolerant of minor slips of the tongue here and there. Besides, the improvement in margins may be humungous.