Rakesh Bhandari wrote:
>
> It is true that Japanese or more likely European firms could catch up in
> the microprocessor business though communications and other technologies.
> There is no evidence in Mowery, Langlois of this actually happening at
> present.
>
> Maybe Enrique could throw in here
I'll throw in my two pesetas, hoping to keep up with this thread high standards. It is true that the US lead in MPU technology is probably unsurmountable. So what? CPU speed ceased to be the main bottleneck in technological advancement at least three years ago. The ugly little secret of the computer industry is that, for 95% of users, a Celeron running at 300 MHZ is already overkill. And now, finally, AMD can match Intel in performance and (maybe) production quantity. HP and Compaq recognize this and that's why they are coming out with $500 PCs addressed at business users, which used to be the cash cow of the computer industry. A $500 PC just doesn't have any room for the profit margins Intel has grown fat on. Add in the enormous increase in fab cost for each succesive generation (a .18 micron fab already costs several billion to build) and the future of the CPU industry, in my opinion, is increased commoditization, ugly price wars, and desperate fights for vanishing profit margins. Intel is yesterday's news, and that's why it has shown no significant profit growth for the last three years - though it may have a brighter future as a speculative hedge fund; after missing tis earnings expectations two quarters in a row, it decided to count the money it made betting on the Internet stock lottery as if it were earnings from business, guessing (correctly) that neither its stockholders nor the SEC would give a hoot.
I am a lot less sure as to where the next frontier of monopolistic profit-making in technology will be. Microsoft's business model of ramming useless upgrades down its customers throats may be sputtering out; witness the cool reception Windows 2000 is getting. Its future is certainly brighter than Intel's, though. The current technological bottleneck is certainly bandwith - if you could double the performance of any once device in your computer, which one would you pick? Wireless bandwidth, in particular, may be where it is at, and Europe certainly has a fat lead there, thanks to its early adoption of unified standards. However, the problem I see with the technology industry in general is that it is absolutely drowning in capital, thanks to the Greenspan Bubble: in just about any promising area you can think of, there are several competitors armed to the teeth with no-strings-attached, lose-as-much-money-as-you-want-for-as-long-as-you-want investor's money. And not just on the internet. That's no way to extract monopoly rents.
Enrique