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Technology Stocks : LSI Corporation
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To: getgo234 who wrote (7703)11/7/1997 4:41:00 PM
From: shane forbes  Read Replies (1) of 25814
 
Hi getgo once again great questions. My feeling until a few days ago was that the governments support these companies at all costs. If they do not make the necessary capital expenditures other companies elsewhere (not quite sure where these days since everything is tanking!) will take over market share. Case in point: Japan of a few years ago. Of course now with the Korean and Taiwan markets in trouble your guess is as good as mine. The IMF to the rescue?

RE: excess capacity. ??? DRAM is no surprise - we all knew those guys have severe excess capacity problems that are not going away anytime soon. Microprocessors and DSPs and analog chips on the other hand I think are still doing more than fine. Other logic chips like ASICs: my guess is that it is not a question of excess capacity but rather company-specific issues. VLSI is at 90-95% capacity, dlo points out VTSS's backlog, IBM's fine. LSI is still wanting. IF and when their markets rebound and they address their design constraints (re: million gate designs) they'll rebound. Hypothetical situation: flick on a switch that will enable those million-gate designs and LSI will be at 90%+ capacity. There are more than likely zillions of little gadgets that can be made faster and cheaper with the high-density designs.

My concern is with the chip-equip makers. So far I have not seen any reports about slowdowns in orders in any of the smaller companies I "follow". The bigger ones too do not seem to have reported any slowdowns. It will take sometime before this Asian crisis thing filters down and the order delays if they come might start showing up this Jan. Who can say for certain? I hope no one starts mothballing - it'll be no fun.

Finally the big foundries such as the TSMCs of the world are still reporting gang-buster sales though I have noticed the pricing issue back in.
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