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Technology Stocks : Exar: any opinions
EXAR 12.990.0%Jul 14 5:00 PM EST
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To: Robert Talty who wrote (68)2/11/1997 4:10:00 PM
From: Chris   of 118
 
I am new to the stock market but I think there may be other reasons for being a lower tier supplier. In semiconductors it is not always best to be first to market when the cost to build the product is most expensive, unless you are certain of getting a premium. If I understand the corporate backgrounder they are in fairly mature markets for the devices they provide. Couple that with declining wafer costs (they are fabless and we know there is a worldwide glut) and there is your increased margin. I would think a company like that could benefit from a focused R&D effort and develop a few proprietary products. And then pick up scraps from more mature products with low existing overhead to pay for the development. This strategy has been quite profitable for other companies. Your point is well taken though, flat revenue will catch up to earnings growth eventually.
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