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To: yard_man who wrote (35551)	6/21/1998 11:55:00 PM
From: Wolfgangus	Read Replies (1) \| Respond to of 53903

Agree DSP's days are #'d. Everyone is already piling in. These stocks are great shorts just like ALSC, IDTI, and the other flash and SRAM high-fliers were. TI's projections have been ridiculous historically. Wolfgangus

To: yard_man who wrote (35551)	6/22/1998 12:38:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

>>Do you think all the money is going to be in multipurpose programmable chips such as made by TI? << are they profitable? is it better than losing money with current capacity? the answers to those questions is the answer to yours ;-)

To: yard_man who wrote (35551)	6/22/1998 11:53:00 AM
From: Knighty Tin	Respond to of 53903

Tip, The history of the semiconductor companies has been to run to where there is margin and then destroy that margin. It happens in every sector. Obviously, when DRAM is doing well, there is no need to look at these smaller niche chips. For example, the Flash market is 5% the size of the DRAM market. The big DRAM cos. did not play flash until the Godzilla chip started to take on water. Then they killed the margins there. Ditto for SRAM, logic chips and graphics chips. The only exception has been MPCs, where the Intel monopoly has held sway. However, the recent downturn in pc demand and lower prices for computer boxes has encouraged firms to even take a shot at the monster. We are now starting to see the advent of embedded DRam, which has been smoke-screened somewhat by calling it "system on a chip." If DRAM is going to be a lousy market for a long time, and it is, the big and good DRAM cos are going to try to combine DRAM with chip categories that still do have good margins. That way they keep their expensive fabs humming and up-to-date technologically and still eke out a profit. However, when everyone from The Titanic tries to climb aboard a sleek 60 foot yacht, the quality of that yacht doesn't matter. It is going to sink under the weight. DSP, in particular, still has a profit margin for several of the players in that category. That is why we see so many cos. and even countries saying that they will de-emphasize DRAM and concentrate on DSP. As capacity rises, prices and margins tank. The fact that TXN, one of the leaders, is dumping DRAM to increase capacity is not good news even for TXN. The only hope for DSP is a return to profit margins for the larger categories, DRAM and SRAM. That just doesn't look likely in time to save their bacon. BTW, despite many co. announcements to the contrary, nobody has a lock on the technology and the mfg. expertise to make DSP cheaply. And, as with DRAM, the more you make, the less each chip costs you to make. However, all this margin killing capacity building is just what the doctor ordered for the consumer. MB