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To: Andrew Vance who wrote (12167)	2/18/1998 4:49:00 PM
From: Andrew Vance	Read Replies (1) \| Respond to of 17305

AV-the following was provided courtesy of myself and others near an dear to Symbios Logic. With this type of release, I would expect two things. First, a announcement tomorrow that they have been sold. Second, the price will be below the $900 million price tag and closer to $600 million or below since it will be a fire sale and will allow the acquiring company reflect this transaction as a favorable deal on their financial statements or to the investment community. This could result in a nice pop in stock price for the acquirer since they will have gotten a "real good deal". Now for the contender to the throne. Scenario #1 - Witchita RAID manufacturing facility is split out of the deal and sold off to one of their top customers NCR or to ADPT, who wants to be in the RAID business (see previously posted article). The rest of the company is sold to an interested buyer. Hmm!!!, Who could that be???? Scenario #2 - Whole company is sold as a unit and new buyer sells off Witchita. Who are the likely suitors for this transaction??? My top 4 prospects are LSI, ADPT, MOT, and xxOx in that order. Now for the reasons. LSI - major competitor to Symbios Logic. LSI gets a good wafer Fab in Colorado Springs and puts a competitor out of business. LSI is able to merge the best of each company's designs into an unbeatable device family offering. There are many complementary synergies between the companies. The combination also ends some fierce competitive pricing wars between the two that has cost each some margins on the business they have successfully won from the customer base. A great deal of efficiencies and cost savings occur when the design, sales, and marketing motions result in a higher percentage of design and manufacturing wins. LSI might be in the market for more internal fab capacity and to improve their product offerings with some of the Symbios Logic "cores". ADPT-Fierces competitors in the host adapter board business and for storage devices such as Zip and hard drives. They goes after each one's customers with a vengeance at times. Again, ADPT puts a minor nuisance in some of their businesses, out of business while eliminating a fierce competitor in other businesses. ADPT does not need an internal IC manufacturing facility since it uses external Pacific Rim foundries. As a matter of fact, the foundry wafer pricing should get considerably cheaper if the Asian Crisis is not short lived<GG>. ADPT wants the Wichita facility, I just can feel it in my bones. They also want part of the Design Libraries along with the fledging host Adapter Board business which hasn't taken off yet. I see ADPT taking out a competitor, selling off parts of the company to recoup purchase costs. The financial benefits of eliminating Symbios Logic would be made up in a short amount of time for either company. MOT-I do not recall if any MOT fab has actually been shut down. MOT is in the business of running fabs and producing ICs. They are probably one of the most cost effective, efficient and productive IC manufacturing companies in the USA and World. With the perceived slow down toward 300mm wafers and the impending explosion in the wireless communications field (after the Asian Crisis subsides), these guys are going to need a great deal more capacity to serve this market. Symbios already provides manufacturing capacity to a very large San Diego CA based company that sell these types of ICs. Therefore, MOT could easily make the type of products for this sector in that facility. xxOx-this is the dark horse candidate. This is the San DIego based company that I spoke of under the MOT section. This is very rapidly growing company with a great deal of success in the wireless type communications field. They have some issues in Asia but these will eventually pass. Their growth has been phenomenal and it may be time for them to stop using foundries and to have their own internal manufacturing capability. There, I spilled all the beans<GGGG> Andrew Hyundai Electronics Puts US Chipmaker Symbios Logic on Sale February 17 1998 20:36 Seoul, Feb 18 (Bloomberg) -- Hyundai Electronics Industries Co., one of South Korea's top three semiconductor makers, said the company will sell its profitable U.S. unit Symbios Logic Co. "We are in talk with potential U.S. buyers to sell the subsidiary as part of the group's restructuring program," said Cho Won Sang, a hyundai spokesman. The company expects negotitations will be completed by the end of March. Money from the sale will be used as working capital for Hyundai's semiconductor plant in Oregon. Hyundai took over Symbios Logic, a non-memory semiconductor manufacturer based in Denver, Colorado, from AT&T Corp. in 1994 for $350 million. It said the current value of the unit, which posted net profit of $36 million in 1996, is about $900 million. Judy Lee in the Seoul newsroom (822) 3702-1604 through the Hong Kong newsroom (852)2977-6600/jsa