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To: Jock Hutchinson who wrote (13904)	7/27/1998 11:55:00 AM
From: Tony Viola	Read Replies (1) \| Respond to of 25814

Jock, thread, we now interrupt this soap opera for a word from our sponsor: technology. Does anyone remember technology? FWIW, Intel is using Symbios, not Adaptec, SCSI chips on their motherboards for the new Xeon servers. The Intel SC450NX server platform is Intel's new flagship server product, built around the Xeon chips, which currently go up to 4 way, later this year 8 way multiprocessor configurations. The Xeons are the server chips that are supposed to raise Intel's ASP's, when averaged against the low price æP's of today, and return Intel to growing revenues and profits. This is good news for Symbios, LSI if the deal goes through. Xeon based servers (I know they've had a couple bugs) are going to sell like nothing ever seen in the server market. Looks like Symbios is going along for the ride. INTEL SC450NX Product Specifications Processor/Cache Processor Supported Up to four 400 or 450 MHz Pentiumr II XeonT Processors with 100 MHz system bus 512KB, 1M, or 2M full speed L2 cache System Memory Memory Capacity 4 GB with 16 DIMM sockets for EDO DRAM DIMM Sizes 32 MB, 64 MB, 128 MB and 256 MB Error Detection Corrects single-bit errors, detects double-bit errors (using ECC memory). Nibble error detection also provided. Integrated I/O SCSI Symbios* Logic SYM53C896 dual channel SCSI-3 Ultra2 SCSI controller. Symbios* Logic SYM5353C810AE Narrow Fast SCSI controller. Graphics Maximum Resolution Graphics Memory Cirrus Logic* GD 5480 1,600 x 1,200; 16.7M colors Tony

To: Jock Hutchinson who wrote (13904)	7/27/1998 12:09:00 PM
From: Hightechhooper	Read Replies (4) \| Respond to of 25814

What I heard: 1) R&D / SGA flat spending for 2nd half vs Q2. What this means: 1) GM will have to remain at Q2 levels (about $155M) in order to keep eps flat at .23 in Q4 (of course this assumes no changes in the tax rate, no material share repurchase and no material changes in other income / expense) What else I heard: 2) GM % will fall BELOW Q1 levels of 43.6% due to the significant impact of the gresham startup (let's give lsi the benefit of the doubt and say 43% in Q4) What this means: 2A) Sales need to be about $360 in Q4 (155/.43) simply to maintain eps in the .23 cent range. 2B) For eps to be .29, gm will have to grow AT MINIMUM by 10M to 165M. Using LSI margin guidance this implies sales of about $385M (165/.43) What I heard: 3) Most of the impact of DVD in 1998 will be felt in Q3 (one can reasonably assume the same for DCAM) What this means: 3) There are not enough major new products available to lift sales in Q4 by the $30M required to even keep eps flat at .23. The most likely scenario is for sales to increase modestly to $335 range resulting in eps in the upper teens at best. Bottom Line: 1) This stock is a value play at these levels and will not get into any sustainable uptrend until clear signs of significant, consistent revenue growth are presence (i.e. Montgomery was right again)