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

To: Bill Martin who wrote (1359)	10/26/1997 7:07:00 PM
From: Bilow	Read Replies (1) \| Respond to of 2389

Pardon me, I use FPGAs all the time, and I don't think I'm incompetent. Yet, if I'm going into mass production, the FPGAs get taken out. You won't find one in your mouse, for instance. (By mass procudtion, I mean more than a volume of 50,000 or so.) For small volumes, you can't beat FPGAs, just like you once couldn't beat the popcorn logic that FPGAs replaced. The question we really need to answer is: What percentage of the popcorn market has already been taken over by FPGAs? Cause if everybody is already using them, we really can't expect big growth out of the industry that supplies them. It is only when a market niche is in the process of being created that the big growth occurs. After the market is filled, your growth returns to the growth of the industry as a whole, until some other competitor comes along and replaces you, in which case you decline. My (nearly) total guess is that a pretty good fraction is already in the FPGA camp, and that is why the growth rate in the business is slowing down even in the face of an excellent economy. Just thought of an unbiased way of determining just how much FPGAs have infiltrated the engineering business. Take a look at advertising for engineering positions. Compute the percentage that mention FPGA experience as a requirement. Check to see if this percentage is still increasing with time. The above research can be performed by anybody with an interest in the answer. I don't have any money riding on the question. How's about one of you financially interested types down in Si valley computing the quarterly figures for the last 3 years? I am a little curious, and I'd love to hear the results of your research. -- Carl

To: Bill Martin who wrote (1359)	10/30/1997 7:11:00 PM
From: Ken Muller	Read Replies (1) \| Respond to of 2389

Bill: I used to sell FPGAs for 6 years. One thing has changed which everyone should understand. The oem buyers are far more sophisticated about FPGA costs. It used to be that a FPGA supplier could design in a base level device and then when the designer needed more speed, slip in the MUCH higher priced -1,-2, or -3 speed selected device. Buyers paid the higher price without asking many questions. That is no longer true. A semi buyer today can get a FPGA conversion quote from a half dozen suppliers in 48 hours. A conversion can be done in 21 days (prototypes). I have seen buyers read the quote right off the RFQ sheet to the FPGA salesman(usually $3-$6). Where FPGAs could be priced $40-$200, they have been forced to $8-$50. The competition has come primarily from asic pricing, not competition between Altera and Xilinx. The margins were kept high during this period become of severe price erosion on 0.8, 0.6, and 0.5 ucmos processes in Taiwan. That is no longer true with 0.35 ucmos. IMO, the days of 63% gross margin are over. BTW, when I saw statements from Altera in the past that they were going to take over the asic market, I had to laugh. Unless you are pad limited an asic wil always be a MINIMUM of 50% cheaper than the equivilent FPGA. Regards, Ken