Very interesting stuff from QLogic - especially as it pertains
to LSI and Symbios.
(1) QLogic's recent kick-derriere highly successful FC chip used LSI's cores (YES).
(2) Symbios is a competitor (duh)
(3) Suggestion that foundry capacity at high end was "until recently" in short supply.
(4) FC standard not "uniformly adopted" at this stage (suggesting
competing standards - hopefully not. Maybe just older technologies?)
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The Company currently competes primarily with Adaptec, Inc. and Symbios Logic, Inc. in the SCSI sector of the I/O market.
In the Fibre Channel sector of the I/O market, the Company expects to compete primarily with Adaptec, Inc., Symbios Logic,
Inc., Emulex Corporation and Hewlett-Packard Company. LSI Logic, Corporation recently made a bid to acquire Symbios....
Until recently, there has been a worldwide shortage of
advanced process technology foundry capacity. .
In particular, the Company's integrated single chip Fibre Channel controller [this is QLGC's new awesome chip] is manufactured by LSI Logic and integrates LSI Logic's transceiver technology [as if we did not know this <wink> Of course Mr. Market was clueless.]. LSI Logic recently made a bid to acquire Symbios. In the event that LSI Logic is unable or unwilling to satisfy the Company's requirements for this technology, the Company's marketing efforts related to
Fibre Channel products would be delayed and, as such, its results of operations could be materially and adversely effected...
Although the Company is currently not experiencing any difficulties in obtaining sufficient foundry capacity due to the current
abundance of worldwide semiconductor fabrication capacity, the Company and the semiconductor industry have in the past
experienced shortages of available foundry capacity. Accordingly, in order to secure an adequate supply of wafers, especially
wafers manufactured using advanced process technologies, the Company may consider various possible transactions, including
the use of "take or pay" contracts that commit the Company to purchase specified quantities of wafers over extended periods
or equity investments in or advances to wafer manufacturing companies in exchange for guaranteed production capacity, or the
formation of joint ventures to own and operate or construct foundries or to develop certain products...
A significant portion of the Company's host adapter board products are currently used in high-performance file servers,
workstations and other office automation products. The Company's growth has been supported by increasing demand for
sophisticated I/O solutions which support database systems, servers, workstations, Internet/intranet applications, multimedia
and telecommunications...
In anticipation of the implementation of Fibre Channel data transfer interface
technologies, the Company has invested and will continue to invest significant resources in developing its integrated circuit
single chip PCI to Fibre Channel controllers. There can be no assurance that Fibre Channel will be adopted as a predominant
industry standard. The Company is aware of products for alternative I/O standards and enabling technologies being developed
by its competitors. The Company believes that certain competitors, including Symbios Logic, Inc., have extensive development
efforts related to products based on the Low Voltage Differential ("LVD") technology.
In addition, the Company's Fibre Channel products have been designed to conform to a standard that has yet to be uniformly
adopted. .
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