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Intel to spend $10b to meet demand

Intel plans to spend $10 billion ($US6 billion) this year to meet burgeoning worldwide demand for computer chips. "We originally thought we would spend $US5 billion this year, but we are spending a lot of money on equipment, and demand (for chips) has been very high this year," Howard High, an Intel spokesman said. "I think $US6 billion is the right number (for yearly spending)." Most of the expenditure will go toward increasing production capacity, while as much as 20 per cent of spending will be earmarked for production of flash memory, executives said. "We are clearly looking to expand capacity as we move forward with microprocessors, chipsets and flash memory being in demand for devices of all kinds," Paul Otellini, executive vice president for the Intel architecture group, said. Intel recently purchased a manufacturing facility in the US that will be used in part to produce flash memory chips, Otellini said. www.intel.comTelstra to invest $3b in PCCW allianceTelstra and Hong Kong Internet investment company Pacific Century CyberWorks have announced an Asia-Pacific telecommunications alliance under which the companies plan to pool assets and cash to form a number of joint ventures across the region. Telstra will invest about $US3 billion in PCCW and inject both cash and assets into mobile telecom ventures, according to press reports. The deal promises to bring much-needed cash to PCCW, which is still trying to complete an audacious takeover deal for Hong Kong's incumbent carrier, Cable & Wireless HKT, analysts said. It also would help Telstra to expand out of its home country, where, as an incumbent in a deregulated market, it faces ever more fierce competition, they said. Telstra was recently awarded a telecom licence in Singapore, where the market was deregulated from April 1. www.telstra.comThe ‘imminent demise' of dotcom retailersForrester Research has added its voice to the chorus of e-sceptics that have been hammering Internet retailers of late, having issued a report that predicts the demise of most Internet-only retailers by the end of next year. "The combination of weak financials, increasing competitive pressures and investor flight will drive most of today's dotcom retailers out of business by 2001," according to Forrester. The market researcher is predicting business-to-consumer e-commerce consolidation will come in three waves: first, companies selling products that have been successful online for awhile, such as books and software, will start merging by late this year. Second, online merchants selling low-margin "undifferentiated products" such as electronics and toys "will collapse before marketing expenditures ramp up for the next holiday season". Finally, merchants selling heavily branded products such as apparel will be stable until 2002. www.forrester.com

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