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Technology Stocks : LSI Corporation
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To: E. Graphs who wrote (7692)11/7/1997 2:59:00 PM
From: RFF  Read Replies (1) of 25814
 
I don't think the reduction in capital expenditures has anything to do with financial distress or poor future prospects. It has to do with the fact that LSI doesn't need to improve or expand its capacity in the short-run - so why incur the costs.

Recent discussion have focused on the fact that silicon advancements have outstripped design capabilities - no one can take advantage of LSI's millions of gates. I think its great that LSI may be shifting from a "make the most advanced chips" mentality to a "make the most profitable chip" - hinted at in the interview with Corrigan when he said he wanted high-volume chips.

LSI currently has excess capacity so delaying capital expenditures isn't going to impact the company's ability to expand sales. With all the economic problems occuring around the world, who knows how strong demand will be over the next year. I hope everyone delays some capital expenditures so that we can get some expansion in margins next year.

Just an opinion.

RFF
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