Date updated:06-14-2007
When two elephants fight, the grass gets trampled, as the saying goes. Intel (INTC) and Advanced Micro Devices (AMD) have been engaged in a price and technology war for a long time. These companies, suppliers to and competitors of INTC and AMD, are affected if one side or the other gets the upper hand.
INTC and AMD also are observing closely the battle between the One Laptop Per Child (OLPC) initiative from MIT Professor John Negroponte, and Intel's Classmate. OLPC uses Linux and is cheaper and uses more efficient power management technology than the Classmate. OLPC is not in production. INTC claims it can't be mass produced in quantities necessary fot the project to succeed.

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INTC
Intel Corporation - $14.55
- +0.76%
- $14.45
Intel Classmate is their version of One Laptop Per Child. The Classmate needs a cooler and has a battery life of 2 hours with heavy use. Bloomberg News, June 12, 2007 - INTC will cut prices of its Core 2 Quad processor by 50 percent on July 22, according to an Intel document given to clients. The chips, introduced in November to run servers and the most expensive personal computers, sell for $530 each, according to Santa Clara, California-based Intel's Web site.

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AMD
Adv Micro Devices - $2.74
- +3.01%
- $2.64
Barcelona is AMD's quad processor, competing with the Core 2 Quad. Eric Savitz of Barrons, reported June 6, 2007: Citigroup’s Glen Yeung wrote in a research note Tuesday that “several sources” at the Computex 2007 show in Taiwan this week, including vendors, distributors and board makers, “have confirmed” that Advanced Micro Devices’ (AMD) Barcelona server processor, originally expected to ship June or July, now isn’t expected until September or October. Yeung writes that “yield problems” were most frequently cited as the reason for the delay. AMD powers John Negroponte's One Laptop Per Child computer. The MIT professor designed a $100 laptop for developing countries. OLPC is designed to use power more efficiently than the Classmate. It consumes 1/6 of the power of the Classmate's LCD in full backlight mode.

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TSM
Taiwan Semicond A - $7.54
- -2.20%
- $7.50
The largest semiconductor manufacturer in the world. Will benefit whether OLPC or Intel wins.

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KLAC
Kla-tencor Corpor - $22.68
- +0.84%
- $22.41
Supplier of yield management equipment to the semiconductor industry. If the OLPC takes off, the need for the highest yield on production runs will be intense, creating a great profit opportunity.

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NVLS
Novellus Systems - $13.94
- +5.29%
- $13.28
Major semiconductor fabrication manufacturer. Should do well if OLPC project comes to fruition. However, a June 14 article mentioned that semiconductor orders forecasts have been slashed 7%.

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VSEA
Varian Semiconduc - $19.51
- +4.56%
- $18.88
Another chip fabrication manufacturer. Should do well if the OLPC project comes to fruition.

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SMH
Ml Semicond Hldr1 - $18.06
- -0.06%
- $18.01
Semiconductor ETF, holding many of the semiconductor stocks affected by the INTC-AMD showdown.

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IGW
Ishares S&p Gsti - $29.78
- -0.09%
- $29.49
Market cap weighted semiconductor ETF, managed by Goldman Sachs. Holds 56 stocks, with INTC and TXN making up 18.2%.
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