Hello Doug Well you certainly open up a n area for discussion. May I play Devil's Advocate against a couple of your points?
a. Number of fabs exceeds demand? Well, there may be too many fabs of the kind needed to meet demand. But: Vitesse has a five month backlog of orders--they can't get their new fab built fast enough. And if LSI's plant (among others) is slated against the wrong size (35 micron, vice 25) then why is there not a shortage of fabs (capable of 25 micron)? b. If SE Asia production costs are less, then LSI should do fine with their plants located there. c. What SE Asia plants can dump System on a Chip ASICs? -- other than plants owned by LSI? d. It isn't clear to me that TXN, IBM, and INTL are entering LSI's space, Doug; nor is clear to me why they would want to if there were an excess of Fabs and excessive SE Asia Competition. e. The speed of the ramp to 25 micron, from my understanding isn't likely to jeopardize 35 micron capacity; surely LSI has a good enough feeling for market demand to determine whether or not to go ahead with their Gresham plant, and they are proceeding per the original plan, despite the fact that the plant could be reconfigured for 25 micron or 18 micron if the decision were made now not to proceed per the original plan. How fast industry can actually move to 25 and 18 microns is worth a bit of further discussion alone... Did you see Shane's post on Corrigan's recent talk in Japan?
So, I guess there are different perceptions of the same inputs, Doug. You could well prove right, but I think I'll stick with a less pessimistic view.. Cheers!! dlo |
