I predicted 15-20% INTEL 1Q06 revenue decline back in Feburary

Back on Feburary 20, 2006, I projected that INTEL will suffer a 15-20% revenue decline in 1Q06, now INTEL's 8-K filing admits a 10% - 20% decline. For me, this was no surprise, and I predicted even larger INTEL revenue drop for 2Q06.

While smarter folks such as Prudential, Morgan Stanley, Joe Osha have figured it out, the real retards are still scratching their heads.

Dan Niles, CEO of Neuberger Berman Technology Management, said that AMD couldn't possibly have gained enough share to force Intel to drop revenue by $500 million. Why? He explained: "The math doesn't work, since Intel's share is nearly 80%".

This kind of statement makes me sick, such retarded words off the mouth of some CEO? We have to improve our education system. My suggestion to folks such as Dan Niles is this: go back to elementary school and re-learn the basic logic.

Joe Osha, though often gave in to the dark force, is probably one of the smartest, back in October 2005, he said that the situation between AMD and INTEL was like a head-on collision of two high-speed trains. I say Joe Osha is smart, because I found that he was the only Wall Street analyst who saw the problem, or disaster for INTEL.

One word: FAB36.

As of 4Q05, AMD captured 21.4% market share with the 200mm FAB30 running at 120 MPH. Now, it's a matter of simple math to compute the output of FAB36, which started production in Oct 2005. You can go read this whole journal, I analysed the production potential of FAB36 numerous times. Some people don't believe my projection of AMD capturing 40% of x86 market exiting 2006, so I did the die count here.

If I assume that FAB36 is in a slow cruise mode and only does 4000 wspm at 90nm, that's enough for an extra 5% of the PC market. As of 4Q05, INTEL market share dropped to 77%, a 5% drop, it's 72%.

But, as I pointed out in January 2006, FAB36 is in high gear (notice the GOOG symbol there?).

The math computes, because INTEL was not only losing share, it foolishly lowered prices trying to stop the inevitable share loss. I proposed the ONLY way for INTEL to survive: kick out DELL and raise prices, but INTEL folks won't listen.

The collapse of INTEL will be sooner than I previously expected. Increasing decline of market share coupled with lower ASPs will result in even more drastic drop in revenue. Unless INTEL follows my advice, I project it to suffer operating loss in 3Q06.