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

To: Charles Thomas Mathews who wrote (12485)	5/17/1998 11:38:00 PM
From: shane forbes	Respond to of 25814

Corrigan on IP business models: ---- Phoenix, Ariz.--The evolving intellectual property (IP) market requires a new way of doing business. To that end, a variety of companies, including: LSI Logic, Rambus, Sony, Oki and Qualcomm have announced new business models designed to promote the growth of the IP industry. Wilfred (Wilf) J. Corrigan, chairman and CEO of LSI Logic, who is credited with being one of the pioneers in developing the concept of IP, said in a keynote address at the In-Stat Microelectronics Forum last week that a new paradigm is called for, one that increasingly calls for "building block" solutions using IP. "I think now the PC market really has become a consumer market and that is a big difference," Mr. Corrigan noted. "The key thing is the Internet. The Internet is making a profound change in how we do business. What I would project is that there is going to be a hell of a lot more links to the Internet via non-PCs than on PCs. The number of Internet users is doubling every 100 days," he noted. "We see this business as several different what we call engagement models. The first one I call the high-tech Kinko engagement model. This is where the customer comes to see you and he says, 'Look I know exactly what it is I want to make. I've got my design engineers designing this already and when it's all done we want you guys to execute it.' That's kind of the traditional ASIC model that started in the '80s. "Then as you move to the next engagement model, which is where the OEM is now willing to delegate more--something beyond the physical implementation--to the ASIC supplier, then you start to add a little bit more value. Then you move on to the next level. It's almost all our IP. The customer is just telling us how to arrange the blocks. But basically its assembling blocks rather than building in IP. And then finally we get to the extreme right where you fully implement and you're really making an ASSP (application specific standard product) at this point." ---- With LSI: <= 1993: ASIC Model 1993-1995: Some Delegation Model 1995-1998: Arrange the Blocks Model 1998+: ASSP Model all guessing... (ASSP model is the millions of chips model I would think) ---- Was LSI's problem in the 1996-1997 area thus purely something that arose from this changing model thing? Did Level 3 prove to be too difficult - too time consuming? Now at Level 4 - ASSPs - happy times again? Was 1996-1997 therefore a sympton of Growing pains / Teething pains - the agony, in mid-stream, of rewriting the rules of the game? ---- Shane (batten down the hatches this week?)