Patrick,
I could swear I responded to you already, but now my post doesn't seem to be on the thread, so I will try to reconstruct it as best I can. Anyone else happen to see it flying across the ether a couple hours ago?
Basically I said that I purposely did not address LSI's future revenues, earnings, or stock prices, because that is better left to others on the thread who are more of an expert than I in that area. Hopefully they will take what I have written and comment on it.
To restate what I said more simply and concisely, there are several design strategies available to semiconductor companies. The low end is to make a quick and easy design, which results in a modest-performance chip. This is fairly easy to do; hence, there may be (and in time will be) a lot of competition, leading to low margins. The other extreme is to do a complex chip design, requiring intellectual property and designers with a wide variety of hard-to-find expertise. This produces a high-performance chip, which customers will want and be willing to pay more for, leading to high margins. However, this approach is fraught with obstacles, which leads to much less competition, but can result in problems bringing a good design to market, in which case the quick-and-easy guys will win anyway. I think the more complex route is the only long-term way to survive in the industry, and it appears that LSI agrees. Whether they will succeed with this approach is still an open question, as it is not easy to pull off.
Regards,
G.P. |
