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

To: Duane L. Olson who wrote (10469)	3/3/1998 8:16:00 PM
From: shane forbes	Read Replies (3) \| Respond to of 25814

TSO: Spoke with Diana Matley of LSI IR today. Unfortunately, with my irregular sleeping ritual, I was half-asleep and did not get a chance to ask or follow up on all the questions I would have wanted to! But any way here's the latest scoop: (Of course: should caveat this by saying this is my recollection. So though I'll try to be as accurate as possible be careful when you read this. I may be using my powers of subliminal deep thought to be reading more into Ms. Matley's comments than were intended...) ----- Q. (me) What do we read into VLSI announcement as it pertains to LSI? Had that big LSI stock killer word of the past - "Inventory" corrections, consumer electronics seasonality? A. (Diana Matley) Communications pushout related to ERICY - something around $15-20 million. LSI not heavily into communications but will be with GSM etc. On consumer electronics seasonality issue VLSI is not nearly as heavily involved in this area as LSI (VLSI - Sega + STBs). So might be product specific to VLSI. Thread comments:(me) Certainly Corrigan explained away the consumer electronics seasonality for LSI as a Japanese thing, as a normal seasonal thing, as a Sony Playstations are still strong thing. ----- Q. (me) Capacity issue: Asked about the 100% capacity claim from Yahoo. Said I found this incredibly hard to believe and that in the past 2 years (from Q1 96) LSI has not been close to this. Said Corrigan mentioned exiting q4 with almost 80% cap. utilization. Is 80% a good number? A. (DM) LSI considers full capacity to be at 80-85% since they like to keep some capacity available for "emergencies". Parts of 1995 where capacity went above 90% were the exception rather than the norm. Don't really want capacity utilization to be over 90% area as that would cause problems if customers wanted more chips. Thread comment (me): Suspect LSI is around 75%-80%, maybe more if we are lucky. Don't think they are anything close to 90%. As mentioned before this 80% number is the best it's been for LSI for quite a long time I think. ----- Q. (me) TCI deal. (I asked this "indirectly" since I would not expect any company to say if they are bidding on a contract or not!) Mentioned Wall Street article about INTC being dead last in TCI bidding deal and LSI with NEC being mentioned. A. (DM) Strength in Satellite STBs. Cable STBs were slow to develop. Had not seen the WSJ article so could not comment on something not seen. Thread Comment (me): Tough to call since if LSI were involved there would be no way they'd let this be publically known (why risk the chance that if they lost out the whole world would know!). The other issue is who IS big in cable STBs? Would the bigger players get first dibs? Thereby shutting out LSI? Or would someone new who would win the contract then ask LSI to make the chips? We can continue to speculate.... --- Q. (me) Networking strong? A. (DM) Yes. Thread Comment (me): Good! Networking was fastest growing segment for LSI last year. Not sure if this was in the entire company or just within the communications segment. Like I mentioned earlier it seems that LSI is becoming a real networking boy - as evidence the highlighted CSCO and CPQ deals in the recent q. release. --- Never got a chance to ask the other questions since I needed my MTV: (a) other areas in strength in computing besides storage? (b) DVD shipping on time (suspect it is - so no point asking) (c) repriced options? (suspect it is - no point asking - will be in annual report or 10-K soon enough!) (d) .... ---- TSO: For me even though LSI-winning-TCI-deal momentum may have waned after the call, the main points to me are the strength in networking and the good capacity utilization. That's what I was hoping to hear. Plus GSM chip will be a big revenue gainer for LSI. ----