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Technology Stocks : LSI Corporation
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To: patrick tang who wrote (14673)8/31/1998 4:16:00 PM
From: shane forbes  Read Replies (2) of 25814
 
True..

The thing about Russia is the problems with the banks. For
economies to grow there must be capital available and I guess
that might be part of the issue (since if Germany is vulnerable
then those banks will reign in lending and so forth...).

Floundering banks is never a good thing for businesses that
want to expand or I guess even just want to borrow to tide over the bad times.(such as any unfortunate capital intensive industry that just saw their sales collapse...)

Though LSI will be fine - I just wanted to add one thing about the R&D spending with companies like these. LSI likely does a lot of design shrinks for their customers - esp. since they move their process technologies quite fast. I think LSI expenses these start up things as R&D (I would guess most companies do) yet it does not seem to me to be real R&D entirely does it? To me that R&D has to be split up into "real new products" vs. "the rest". I'd be darned if I knew how much of LSI's R&D is real new products. Since LSI's work is still quite design intensive this means that they are doing an awful lot of design shrinks for example.

This is why I was so optimistic about the newer larger volume chips - like DCAM, DVD, GSM etc etc. LSI has to build fewer designs and more chips not fewer chips and more designs as they have been doing (the ASIC heritage).

Anyway LSI is still fine for the next up-cycle. When it comes it will be huge. My guess is that we will have at least -10% "growth" inm the chip industry this year. More likely it will be -13%. Thus if LSI holds up to -3% to flat revenue in this disastrous period for the insdustry I'll be extremely happy (stock price notwithstanding).

Also LSI's design wins are up.
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