LSI Logic's Corrigan on Chip Industry, Stock Market: Comment
(Bloomberg) -- Wilfred Corrigan, chairman and chief executive of LSI Logic Corp., the biggest maker of custom semiconductors, discuses the computer-chip industry and the stock market. The Milpitas, California-based company said yesterday that third-quarter profit fell 65 percent because of acquisition costs, while sales rose 35 percent on sales of communication chips.
``The outlook for the semiconductor industry still looks strong; 2001 looks strong. You have to look at the facts. The worldwide telecom infrastructure is being rebuilt at an enormous rate and will continue for another 10 to 15 years. Nothing is going to slow it down. Other areas are doing well, like wireless and PCs, despite recent news and worries.''
``What you are seeing is a very nervous stock market that doesn't connect with the real world that companies operate in. There is a quarter-to-quarter hyperactivity (in the stock market) that is not very rational.''
Corrigan said chipmakers are far from manufacturing overcapacity, which the industry uses to mark the beginning of a decline in sales and profit. LSI expects to spend $600 million this year and $600 million more next year to expand chip- production capacity, he said.
The shares of semiconductor equipment makers such as Applied Materials Inc. have fallen along with many of the chipmakers, Corrigan said, although the industry and LSI are still expanding capacity. Shares of equipment makers ``are good buys right now,'' he said.
Oct/25/2000 15:09 ET |
