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

To: ET who wrote (9758)	2/13/1998 12:34:00 AM
From: shane forbes	Respond to of 25814

Yup that was so incredibly astute - tell me something I don't know... --- Not finding fault with LSI's high R&D per se. Am aware that this is in effect a form of capital spending without bricks, mortal but with brains. [Invest now for future benefits.] Still there should be a measure of the effectiveness of R&D. You can see the benefit of a 0.25u fab but we have no idea how effective LSI's R&D is. [Also aware that it's relatively high for LSI because sales have been pretty flat.] For instance what chunk of LSI's current yearly revenue is produced by recent R&D efforts. Is a good chunk of it going into basic research? Is a lot going into R&D projects that are then stopped dead because the market was not there or they ran into an engineering problem or the end-product was not cost effective. Or to put it succintly how much will each $1 invested in R&D produce in terms of sales. [In the same way that each $1 of cap. exp. can be expected to generate x$ of sales.] Darn if I know. No one's denying R&D is not a good thing but sometimes you have to know which spots (markets) to attack - going after everything can slow down everything. --- (Any way you should not take things out of context. We were talking about how LSI's high R&D over the last couple of years may finally bear fruit when the nascent DVD market takes off.)