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Technology Stocks : LSI Corporation

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To: Moonray who wrote (10319)	3/1/1998 6:54:00 PM
From: shane forbes	of 25814

Moonray: That's a very nice big-boy leaders' basket. Might add on someone like AMAT to balance the semi-equips. ---- Semis: These are the top growth areas acc. to a recent publication: area (growth rate expected) DRAM 31% - but you'll never catch me here! MOS Std. cell 31% - [how could anyone not pick LSI here !!! ;-)] Flash 30% - again you would not seem me here! PLDs 28% - [likely can go with anyone here - ALTR, XLNX fine] MPUs 25% - [INTC] Other Analog 24% - [ADI fine though ADI will also do very well in DSPs. There also is another analog area called consumer analog at 17% further down the list] ---- Not sure where DSPs would be included in the list but perhaps in MPUs. Certainly it should be in the 25% - 30+% growth area. ---- So the way I see it ADI, INTC, ALTR & XLNX will capture virtually the entire growth in the semiconductor sector without going for the more commodity stuff such as Memory and Flash. (However INTC may be "changing" - longer term I like the Merced and the fancier chips. At some point voice will need to be incorporated and then there will be a need for faster processing power. Near term they have a battle on their hands with the cheaper computer paradigm with us from now on.] Secondly the beauty about picking companies like ALTR and ADI is that they are dominant companies in their niches. So that whereas an LSI would be (soon if not already are) competing with a jungle of companies and MU is already competing fiercely in DRAM, companies like ALTR and ADI (and to be fair even NSM's analog area) have much of that growth rate to themselves. In fact since they are so dominant in their niches they might conceivably grow faster than the rates shown. However, to repeat, the fiercely competitive sectors would have many people going after a piece of the same pie. Therefore for l/t investing stay away! ---- On the semi-equips I have no problems with both AMAT and NVLS long term. NVLS also has the Cu thing going. AMAT is just plain dominant. However I do not have a feel for the various types of niches there. [One area that I know should be dominant for the next several years however is DUV and that's why I'm going to rue the day I ever sold my SVGI.] ---- On the stock price movement over the next year I expect the years 1999-2001 to be very good years for the semis. Esp. since the Asian thing is going to squelch some demand n/t. Therefore it should rebound nicely next year. Also Korean/Japanese problems should result in lower additional capacity over the following years. Thus demand should be robust and capacity may be in control. The 2 big end-user segments are consumer electronics gadgets and automobiles. For the former LSI(we hope) and for the latter ADI (maybe). Therefore since LSI has been in a funk the longest, I expect LSI (and ALTR) to be the best producing stocks over the next 48 months. Yes and I have a Bridge to sell as well. (But honestly as long as LSI does not get sideswiped they are in a good position for the long term.) --- Shane.

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