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Technology Stocks : LSI Corporation
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To: shane forbes who wrote (18598)5/28/1999 1:19:00 PM
From: patrick tang  Read Replies (3) of 25814
 
The world of semi start-up in the Far East has changed from the DRAM model to the foundry model since DRAMs been bad for 3+ yrs while foundries been good for 3+ years. For the next downturn, I expect the foundry guys to take the blunt of the downturn when they have to produce wafers at a book loss for the IP guys.

Those Silterra guys in Malaysia will not be the only one, though probably the first one. Right behind them within the next year will probably be at least another 3 or 4 guys trying to build mega-fab foundries. They will be in Thailand, India, Vietnam whatever. By the time they gets ramped up, there should be an over-supply of foundry capacity and only so much good IP to go around. The IP guys will rule. There is no need for LSI to build the interim fab before the 12". It will be much cheaper to buy foundry capacity at below cost prices.

patrick
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