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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: semi2000 who wrote (10742)	11/7/2002 10:18:06 AM
From: Cary Salsberg	Read Replies (3) \| Respond to of 10921

RE: "How is cost of revenue LLTC/MXIM much lower than ALTR/XLNX? Is it that process technology used is cheaper or less advanced but still has high IP value?" ALTR/XLNX are fabless digital chip makers. They pay the most advanced foundries (TSMC, UMC, IBM) for their silicon and their business model is more leveraged to revenue levels which are currently below expectation. LLTC/MXIM own their analog fabs. They have proprietary process technology which is applied across a broad spectrum of products. RE: "LLTC R&D is too small but thats the question to you as to how they sustain hihg revenue with long product life cycles inspite of lower r&d" When a company has very close contact with customers and a strong history of providing leading edge, sole source products, customers often pay up front, one time engineering costs. The "R &D" expertise gained from such engineering becomes part of the company's intellectual property. RE: "Why ALTR,XNLX SGA costs that high compared to LLTC/MXIM" ALTR/XLNX are building general platforms and must partner with customers, IP vendors, EDA vendors, and other chip vendors, and must be involved in standards groups. Again, they are modeled for higher revenues. RE: "MXIM R&D is more than 3 times LLTC, but 2x rev of LLTC" For many years, MXIM's after tax profit margin trailed LLTC's by ~3-5%. Now LLTC is 39% and MXIM is 25%. MXIM has decided to accept lower margins in favor of higher revenue growth rates. They bought Dallas Semiconductor to add a complementary business. Dallas had much lower profit margins and that is affecting the numbers you are looking at. MXIM will slowly bring those margins up to MXIM's level.