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To: BWAC who wrote (42493)	8/4/2002 11:43:37 PM
From: DanZ	Read Replies (1) \| Respond to of 53068

Thanks, Joe. Luckily I had a spreadsheet saved from 1998 when I went through a similar exercise on this thread. That saved half the work. It is scary to buy semiconductor stocks (or any stock) when they are dumping like this. However, the demand for semiconductors will increase with growth in the economy. During a recession, people forego purchases, which results in pent up demand for a wide array of products that contain semiconductors. The demand will eventually come back, and the SOX will go up. BWAC: You are correct. The data in the 1998 table is as it was in 1998. I didn't adjust the stock prices or number of shares for stock splits. LSI has a market cap today of $2,630,280,510 versus $1,800,092,188 in 1998. The company's shareholder's equity has increased 67% since 1998 and the market cap increased 46%. They earned a total of 303.2 million in 1999 and 2000 and lost 992 million last year. The loss last year was primarily due to a 211 million charge for excess inventory, an increase in R&D expense of 124 million, and a decrease in sales of 953 million. It is interesting that LSI has continued to spend about twice as much on R&D as a percentage of sales in the last twelve months than in the last four years. From 1997 to 2000, they spent about 14% of sales on R&D. They spent 28% of sales on R&D in the last twelve months. All of this increase is not due to lower sales as they spent about 60% more on an absolute dollar basis despite lower sales. I haven't kept close tabs on the company in the last year, but I would guess that they made an acquisition that they are writing off as R&D. Do you know if this is the case? LSI is a well managed company and I'm sure that the increase in R&D will pay off in the future. Technology companies have to spend on R&D even during bad times or they will lose their competitive advantage to more innovative companies.