Getgo, my view of this and also in general:
The whole business world is like a pyramid. For those at the top that hungers for the best, cost no objective, ASIC is fine. But this pyramid grows up. Today's specialized ASIC chips are tomorrow's commodities as they migrate down in technology towards the middle of the pyramid. At end of like, they become the jelly beans.
But for those at the top, there will always be business for the specialized high prized stuff.
LSI seems to be very able to remain growing in technology to stay at the top. However, as part of the nature of being the top (monopolies like uSoft no counted), the total market can be limited. I would like LSI to be able to be a mass manufacturer so as the migration occurs, they can still retain the commodity market by making more of the same chip at much higher volumes but lower margins. In another words, their total sales would grow much faster if their manufacturing is efficient enough to compete with the likes of TSMC in commodity parts.
I don't really see any way out of it if they want to be a $5B company 3 years from now. And from the last cc, Corrigan seems to want to target the consumer market, especially in Asia. For that work, they will have to shift the company to also include an efficient manufacturing model besides simply IP. So I am hoping that Corrigan is already actively doing just that.
patrick
PS, a manufacturing model can also mean profit during good times - TSMC was making 50%+ margins at the last round. |
