Tuesday, February 10, 2009

Intel makes a $7 Billion Bet

Earlier today, Intel announced a two-year plan to expand existing factories in New Mexico, Arizona, and Oregon to manufacture silicon wafers with 32nm process technology. This announcement, coming during these economic times, is certainly not trivial... and it is some welcome news on a day when the markets are reacting with disapproval to Pres. Obama's Monday night press conference and Treasure Secretary's Geithner's bank rescue plan. As of this writing (12:40pm EST), Intel's share price was still struggling (down a little over 3½%).

Nevertheless, I see this as boding well for Intel's future. AMD is having trouble keeping pace in terms of price & performance. Microsoft is pushing hard to get Vista in their rear-view mirror, and the release Windows 7 will likely inspire consumers to replace their now-aging XP machines. Plus, the claim of 7,000 new jobs in those three states will help to put the negative vibes of the Irish plant closings behind them. Expect Intel to reestablish themselves as the king of the chip mountain inside of 15 months.

Read Intel's Press Release: Intel To Invest $7 Bln. In US Manufacturing Facilities
Intel Corporation: INTC (NASDAQ)
Microsoft Corporation: MSFT (NASDAQ)

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