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Technology Stocks : LSI Corporation
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To: getgo234 who wrote (14807)9/7/1998 7:11:00 PM
From: DavidG  Read Replies (1) of 25814
 
Getgo,

Wilf did indicate to us that as the Sony chips matured they expected lower production costs and therefore contracted a lower price for each of the chips. Wilf also indicated that although the revenues will drop significantly for the second year prices the margins on those chips will remain high...and that is the bottom line which we should really look at. I believe the author of that article was putting a negative spin on these Sony facts... Now these ARE specialty chips but look at how rapidly the DRAM chips production costs are reduced as the linewidths and testing are improved...more than double the percentage of these drops.

Remember Wilf's positive spin? The margins are still high on the chips but the revenue for Sony Playstations is now less than 10% of LSI's overall revenue. Also the "LSI shorters will not be able to use those false Sony rumors to manipulate the stock"...(maybe not a direct quote but pretty close)

DavidG
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