Patrick: I am not so sure that LSI is that strong in DVD for the box. I recall Wilf saying that they had just started production on their first DVD chip for a box at the 1Q CC. I will check into it.
One other take on the value of the Symbios purchase:
pubs.cmpnet.com
The above link has been cited here on at least two occasions, but not as it pertains to Symbios, and some further interesting information can be derived:
1. In 1997 Symbios had a higher percentage of its sales in Standard Cell business than LSI--approximately 66% to 54%. And while not all standard cells are the same, and Symbios has been characterized as a semi-custom chip maker, it is pretty clear that the Symbios product line is in the growing area of ASIC technology, and as a result will help rather than hurt LSI product mix. Indeed, Symbios' higher percentage of standard cell business should further lessen the blow that LSI is sustaining with its diminishing gate array business. As Shane has written, "Bad" LSI is disappearing, and "Good" LSI is growing at a rate of 30%, except that now "Good" LSI has just gotten 36% bigger in sales. with a lesser increase in "Bad" LSI sales.
It would be interesting to discover the duration of the effective contract for a standard cell customer versus a gate array customer, both in terms of individual product and further customer business. Obviously, one of my standard themes is the more advanced the technology, the longer the relationships with a customer.
2. If combined, the Standard Cell business for Symbios and LSI would have made the new LSI the world's second leading provider of standard cell chips with $1100 Million in sales. Only Lucent would have had more sales. Since Lucent had a much smaller percentage of its business in the gate array market, the overall growth comparison for Lucent chip sales was much more impressive because gate array is clearly a declining business. By mid '99 LSI will have a similar product mix that will enable year over year comparisons to be much more favorable.
Here, it would be interesting to discover the percentage of gate array business that "moves up" to standard cell business as opposed to the gate array business that goes elsewhere--either to gate array or another type of product other than standard cell.
3. The combined growth rate for the two companies in Standard Cell sales would been 33% in 1997. Anyway you look at it, this figure holds great promise for the future--especially for the Symbios division with its limited international exposure.
Furthermore, an uptick in the semi business should have a two fold effect on LSI-the first of which is that per se, an uptick will mean more business. The second positive effect is that a semi uptick will spur the perception by potential Standard Cell LSI customers that the time is right to move to LSI's hard wired designs as opposed to PLD etc., because the additional "start up" costs are now justified with the promise of sufficiently greater volume to offset costs.
We shall see. |
