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

To: shane forbes who wrote (7975)	11/26/1997 5:53:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

This could be a threat to the gate-array business of companies like LSI down the road when the price/gate comes down. From XILINX: biz.yahoo.com (about half of LSI's current business is gate arrays)

To: shane forbes who wrote (7975)	11/26/1997 6:19:00 AM
From: shane forbes	Read Replies (2) \| Respond to of 25814

A hint of the cost of DVD related chips - $40 / chip that's what SGS Thomson was charging for an MPU, MPEG-2 decoder and antipiracy thing-a-ma-gig in 4/97: www2.computerworld.com Prices of chip related thingies of course plummet a few months after initial production runs but now we have approximate revenue/chip for 3 of LSI's biggies - PlayStation (approx. $15-$22, think lower end but not sure), DCAM for digital cameras ($35 initially, maybe around $25 now) and DVD chip (have no real clue but above article hints that maybe the cost is around $15-$30 depending on what exactly LSI supplies with the core chip). In terms of revenues therefore: the PlayStation chip which I think is now being produced at a 2,000,000 / month run-rate is generating a run-rate of around $360,000,000 / year (used $15/chip - somehow I think LSI is giving them an even bigger discount... - I think conservatively could push this to around $300,000,000 run-rate for PlayStation chip (sounds closer to being the right number considering about 20% of LSI's business is now tied to the PlayStation). For DCAM assume LSI has 25% of digital camera business. Estimated at 6,000,000 digital cameras in 1998. At $25 a chip this is $38,000,000 run-rate in 1998 potential to double or go even higher in 1999. For DVD chip assume $15 conservatively for PC chip (the OEM drives themselves cost around $150 or less these days I think) . Need to check what number of units will be sold in 1998. Can't remember. Let's say 10,000,000 PC DVD drives. Assume LSI responsible for 30% of market then run-rate is 45,000,000 / year easily tripling or further in 1999. No clue about consumer acceptance of DVD drives. Assume meager 250,000 units for LSI at around $20 a chip (assuming more is needed) - or 5,000,000 run rate (sense is this is a serious understatement). Conservatively 50,000,000 from DVD. So PlayStation, digital camera and PC DVD should theoretically generate 390,000,000 in 1998. Of course PlayStation will see new generation and no one knows conclusively that LSI has the next generation chip. Still 390 big ones is nothing to sneeze at and in 1999, if DVD triples to 150,000,000, digital cameras double to 80,000,000 and PlayStation (hopefully) remains flat at 300,000,000 then LSI in 1999 will be generating a very fat 530,000,000 from these 3 chips alone. Add to this set-top boxes (around 25% market share is LSI's). And does any one else see LSI becoming the dominant consumer electronics chip maker down the road... We can hope. Touche