We believe PC demand in the last two weeks of December was terrible, leading to lower expectations for 2001.

We believe that since Intel's pre-announcement in early December that consumer and commercial demand has continued to get worse with commercial showing the most disturbing trends. In addition, we believe that servers, which had actually been on track for part of the quarter, saw some softening that we believe is related to corporate IT budget stretch outs.

Intel revenue and earnings per share were in line with our expectations, but consensus for 2001 will be slightly down revenue, which has not occurred since 1986,

It seems as though more aggressive pricing is not spurring much of an increase in demand, resulting in a trade-off between profitability and revenue growth.

We believe that demand is now likely to exceed Intel's processor supply now through the third quarter and possibly into the fourth quarter.

We continue to believe this is a second half story, but need to see revenue growth return year-over-year given this is the third-quarter in a row of revenue estimate reductions.