Prediction Wizard

Intel was the first heavyweight  NASDAQ100 tech company to report  4q profit.

The company easily surpassed analyst expectations of 30 cents per share when the report  came out  at  40 cents per share.

The long-term chart of Intel is  less encouraging. Here is the monthly chart:

Just the days before the Intel report  I was viewing a  video, which was created with  Gordon Moore, who was one of the founder  of Intel, a real technology pioneer.

The other two founders were Robert Noyce and  Andy Grove (Gróf András, who was born right here in Budapest, Hungary in 1936, and who was  at the helm of the company as  CEO for very long time during the booming 90-s, and a few years in this decade.)

The link to the video, that triggered some of my thoughts could be found here: http://www.youtube.com/watch?v=gtcLzokagAw

 Some of my thoughts:

1. Though the video is already two years old, there were only a bit more than 5000 viewers,  which is less than the number of visits to  some popular bloggers, musicians within a week.

Looks like people not  really interested in history, and what old and wise pioneer could say about the  accomplishments of his life. At the same time just in Intel, they have more than 83 000 employees, and  to say,  billions of people us electronics, and IC-s (Integrated circuits, and microprocessors) without knowing what it is at all.  It is the thing, that  made possible almost all technology advancements in the past 30-40 years,  used not only in computers, cars, TV-s, phones, gadgets, but everywhere in almost all technology including, medical technology, biotechnology,  and we would be absolutely nowhere without  that technology.

2. Today, people just want to put in the minimum effort and want to get out the maximum benefit of everything, and hard work is just  something not  really accepted as an option.  Why do work, when others already invented everything? We just have to enjoy their  work. Nothing is further from the reality, but I think the inventors of the future most be even more focused, as there are a huge  amount of noise in the information universe, that can distract  innovation. The usefulness / efficiency of information, to generate new information is degrading in most of the cases.

3. Mr. Moore established the Moore Law, which states that the number of components that could be implemented within a specific IC could be doubled in about two years. That law served the  computer industry for more than 30 years, and still in effect. But I have the strong conviction, that  very soon  the Moore law will  become invalid.

Today this technology  quickly approaches the theoretical limitations, that materials and physics allow to  implement. Less than 10 years ago the wire line, used to create the connections between components was above 100 nanometer. Today it is at about 35 nanometer. (The hair is about 1500 times that thick.)

The theoretical limit will be about 15 - 18 nanometer. (nm)  To reach that final limitation, we probably have less than 10 years, maybe less than 8 years. After that the great technical revolution, that started with the IC-s  during the seventies,  will quickly  level off.

 4. Mr. Moore at this ripe age still talk with real enthusiasm. Especially when he talks about the first fab at Intel. (The production facility, where the IC-s or chips created.)

 5. Intel, as a company probably will be a leader in the next 5 - 10 years, but after that, the ball will be in the air, and everything could be questioned. If for example China produces  the same, compatible processors for the whole word for half the price, than not much option remain for companies, like Intel.

It is natural that in a time, when computing is leveling off,   and people do not really  need more powerful processors for everyday use,  the company try to diversify into the mobile computing gadgets, including phones and many other lower cost areas. With Windows 7 users will migrate to the 64 bit computing. The world was satisfied with 32 bit computing for more than 20 years. For homes the 64 bit world will be fine  at least for another 20 - 25 years, if not more.

6. Analysts tell us that the new computer upgrade cycle is just around the corner and that will push Intel stock to the stratosphere. The fact is that we gain almost no productivity improvement Today, as most people currently use less than 20% of the already available processor  power in their computers.

Probably the most  important reason, that companies, and individuals upgrading to the next operating system, the Windows 7 is, that Microsoft is still playing game, when announced,  that will not support Windows XP after 2011, and will not support  Windows Vista shortly after that.

7. The current CEO of Intel still keeps the old rule, that for a High tech company it is mandatory  not to stop investments in technology during  recessions. Actually during the past few   years  Intel heavily invested in new  technology.  Obviously Intel does not want to get left behind, as it happened a few years ago, when AMD temporarily had better technology and started taking market share at an alarming rate. 

Finally  I would quote  the Intel CO, Andy Grove, who wrote  in his book in 1998: "Only the paranoid survive"  That is also true for  the stock market player. We do not have enough time to verify each and every  information, that we read or use.

To compensate for that we need trusted sources.  All critical  information is tested, but some less critical accepted as  True, if presented by trusted sources.

  Joe Papczun