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Technology Stocks : LSI Corporation
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To: patrick tang who wrote (19242)7/10/1999 8:25:00 PM
From: Jock Hutchinson  Read Replies (2) of 25814
 
“Suppliers of PLDs and other standard products are less likely to pass higher wafer prices on to customers, because they can amortize processing costs over millions of units, whereas ASIC suppliers will have a harder time absorbing rising mask costs, said a spokeswoman for Altera Corp. in San Jose. “

Patrick: It was just ten months ago that Erica Klauer was telling the world that LSI was doomed at a price of 14 because of the number of small fabless ASIC players that were entering the market and carving away at LSI's ASIC domination. Now it appears that those same chipless players won't even be able to get into the front door during the beginning of this trip up—making it less likely that they will be able to get in the front door until the next capacity glut. In other words, these ASIC suppliers will probably need to wait a full two to three years before they even begin to try to ship product to “customers” with long memories who remember when they weren't able to get any product whatsoever. What a sad state of affairs for fabless producers of the “hardwired” ASIC chips, which theoretically have an advantage over PLDs, because during periods of peek demand for the product it makes economic sense to have ASICs rather than the bulkier PLDs, since it is here where economies of scale supposedly occur.

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