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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Jock Hutchinson who wrote (20190)	10/14/1999 9:45:00 PM
From: DWB	Read Replies (2) \| Respond to of 25814

A couple thoughts on INTC/DSP and CDMA... 1) Patrick said..."The reverse argument is Intel may have bargaining power with their portfolio of patents that DSP or even LSI may not have. Perhaps overall, it might be a wash." At first I thought this might be the case, but then I came to the conclusion that this probably wasn't the case. QCOM currently is fabricating ASICS out the wazzoo, with whatever IP it needs from other vendors already negotiated. The new negotiations will revolve around INTC's ability to use QCOM's CDMA IPR. And while the contracts between the Q and DSP undoubtedly allow them to yank them under the conditions we are now seeing (i.e. VLSI/Phillips), that doesn't entitle INTC to renegotiate any existing contracts that might exist between the Q and INTC, if such are currently in place. 2) INTC is no longer a fab. for QCOM. I think it was one or two generations of their ASICS ago that they moved to Taiwan Semi, along with the IBM foundry work they already had. Therefore, it is doubtful that INTC could threaten their production in that regard. 3) INTC would not have ponied up $1.6 billion for DSP if they didn't have the CDMA situation well in hand, which makes me think that QCOM management and INTC management have already gotten a deal in place (see the INTC conference call today where they state they'll be able to keep equivalent DSP operations running through use of appropriate financial means or something to that effect). I read that as, we've already negotiated a license with Q, and it cost us a good bit, so we're not going to say anything else. It also tells me that Q management approves of the whole situation. Bottom line, this just shows that INTC thinks CDMA is a great opportunity to replace the growth margins that the PC arena aren't supporting anymore. That bodes well for LSI if their chipsets can compete on performance and price. DWB