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



To: etchmeister who wrote (186473)1/8/2012 2:40:05 AM
From: Johnny CanuckRead Replies (1) | Respond to of 186765
 
I think the challenge for companies that are out sourcing their manufacturing to contract foundaries is that you might find your unable to meet demand if other contract customers are willing to pay more for existing capacity or if another company is a bigger customer to a specific foundary. I believe AMD saw some of those issues last year.

The cost of building foundaries for the greater densities is so high that only companies with very deep pockets can afford to underwrite such as ventures. The unfortunately part is that it might be stiffling innovation and competition as only the largest companies have enough purchasing power to get concessions out of the contract foundaries.

INTC is on the right track by relying on it own foundaries as it keeps their destiny in their own hands. We have already seen INTC partner with other companies in cases where the risks are high. It seems get a plant up and running with yields to make the plant economic feasible is not as easy as it once was with lower density technologies.


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