<?Qualcomm (QCOM: news, msgs) is a bit arrogant and their product isn?t completely
integrated,?
Daane said. ?We?re finding that customers want competition and that is helping us get
design wins.?>
By Michael Baron, CBS.MarketWatch.com
Last Update: 3:30 PM ET Jun 15, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- Challenging Qualcomm on its own turf, LSI Logic expects to introduce
handsets based on its own code multiple division access (CDMA) technology in the fourth quarter,
according to John Daane, an executive vice president at the semiconductor manufacturer.
Daane said LSI (LSI: news, msgs) sees CDMA, where it will be Qualcomm?s lone competitor, as a
high growth area. He estimated the company?s CDMA sales could total several hundred million
dollars annually in a year or two.
Daane was speaking at a Bear Stearns Technology Conference here.
?Qualcomm (QCOM: news, msgs) is a bit arrogant and their product isn?t completely integrated,?
Daane said. ?We?re finding that customers want competition and that is helping us get design wins.?
Daane added that second quarter bookings have been tremendous due to booming demand for
communications equipment, especially from broadband and optical networking firms.
LSI now expects communications chips to account for 50 percent of its revenue in the third quarter,
ahead of its previous expectation that this would occur by year-end.
Daane also said communications chip revenue is expected to grow 70 percent this year, up from the
company?s previous guidance of 60 percent.
LSI reported revenues of $615 million in the first quarter. The communications business accounted
for about 40 percent of that business.
To accommodate the rising demand Daane said LSI plans to increase production at its Gresham,
Oregon fabrication plant to 3,000 wafers per week, up from 2,500.
Gross margins are also expanding. Daane said LSI expects margins to be in the low to mid 40 s for
the rest of this year and the low 50 s next year.
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