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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Calvin Scott who wrote (5683)	4/23/1998 1:14:00 PM
From: Bosco	Read Replies (1) \| Respond to of 8193

Dear Calvin - thx for the reply. As you may realize - and I openly admit - I really don't know much about fab in general and CRUS operations in particular except for some basics. While your reply [about things like overcapacity] is reasonable, I was curious about your original statement, which in effect said "damn overutilization, full speed ahead." So, regardless of the location of the fab, it is still overcapacity, as you seem to have agree. So, the bottomline may be which is cheaper - or less expensive, if it is kinda like the lesser of 2 evils type of things. I really don't know the legal ramifications in the LU deal. I did recall that CRUS has renegotiated with LU last year to lower the production ratio between the two. Again, my apology for knowing as much as I should have [and that is the reason I ask the question] before I open my mouth. Now, I got the impression that you have meant to maintain utilization at Micrus and Cirent, regardless. Am I getting close? Thx rgds Bosco

To: Calvin Scott who wrote (5683)	4/23/1998 6:43:00 PM
From: Synapsid	Read Replies (1) \| Respond to of 8193

Last fall, a SEC filing mentioned that Cirrus had renegotiated its contract with Taiwan Semiconductor Manufacturing Co. (TSMC), so that it would no longer be obliged to purchase a certain amount of capacity, but instead would pledge to manufacture 50% of external capacity needs (not met by MiCRUS or Cirent) at TSMC. I interpreted this to mean that Cirrus was moving quickly to manufacture all of it chips at MiCRUS and Cirent, as you suggest. However, that leaves the question of why there is still a big undercapacity problem. Maybe the added capacity at Cirent caused overcapacity, even with all chips manufactured in the joint ventures? Perhaps they could not transition products manufactured in Taiwan to the joint venture fabs quickly enough? Of course, high inventories and anticipated short-term decline in mass storage volumes are the major factors though.