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To: Tim Esser who wrote (34947)	8/5/1998 8:56:00 AM
From: BillyG	Respond to of 50808

LSI Logic playes up China, and teams with Thakral to offer a DVD player kit....... INTERVIEW-LSI Logic bullish on Asia despite crisis By Paul Eckert BEIJING, Aug 5 (Reuters) - Chip maker LSI Logic Corp. , which on Wednesday launched its first major foray in China, sees Asia as a major market for its high-technology products despite the region's current financial upheaval, a senior official said. "Our business in Asia will grow substantially in 1998 over 1997," said Rick Marz, executive vice-president for geographic markets at the Silicon Valley-based firm. "Although our sales in Asia excluding Japan were quite small -- starting at a very, very small base and were nonexistent in China -- as a percentage they're actually showing us probably the greatest growth opportunity of any other region of the world," he said in an interview in Beijing. Marz said that Asia excluding Japan -- where LSI Logic has had strong success providing specialised chips for electronic games -- accounted for less than 5.0 percent of the firm's business. Despite Asia's financial turmoil, he expects demand for LSI Logic's system-on-a-chip products to soar as the region leapfrogs analog technology and goes digital in the fast-growing communications and home entertainment fields. "We are seeing paradigms that are unique in Asia and they are skipping entire evolutionary generations and going right to the digital world and to the leading edge of technology," Marz said. "In Asia, we will start to see a very rapid convergence to digital player machines for movie content and other uses," he said. That trend is well afoot in China already, where LSI Logic on Wednesday announced an alliance with Singapore's Thakral Corp Ltd to co-develop a Digital Video Disk (DVD) manufacturing kit tailored to the Chinese market. The kit, which will be made available to Chinese OEM manufacturers in the fourth quarter, bundles LSI Logic's DVD decoder as well as software, debugging and testing tools and a DVD player drive made by Japan's Sanyo Technosound. China, with tens of millions of Video Compact Disk (VCD) players in use, is a logical market for the DVD, which offers better audio and video quality, Marz said. VCD technology is widely used in China, where players cost as little as around $120 and are ubiquitous in urban homes, cafes and bars and on long-distance buses. Nearly 20 million VCD players are expected to be sold in China in 1998, industry sources say. "DVD is the natural follow-on in terms of performance, quality, and features," he said. Marz cited DVDs -- a product that didn't exist several years ago -- as an example of a field where high technology firms can play to their strengths in China's rapidly evolving economy. "Having the ability to bring a lot of high-level technology to the market reduces a lot of costly local research and development that would ordinarily be required," he said. The ability to offer cutting-edge inputs "defines a lot of the opportunity in China, where you have an aggressive economy that is trying to take something and get it quickly to manufacturing and to the customer and do it cost effectively," Marz said. As LSI Logic has come on stream with components that are ready to use by Chinese manufacturers with neither the technology nor the capital to develop their own, China's market for end products such as mobile phones and VCD players has shot up from nowhere, he said. "The economies of an evolving China, especially in the coastal and the major metropolitan areas, provide a market that wasn't available five years ago," Marz said. Marz was in Beijing to oversee the launch of an LSI Logic design facility to enable Chinese manufacturers of digital home entertainment products to integrate the firm's specialised semiconductors in DVDS, satellite television set-top boxes and digital cameras. -- Beijing Newsroom (86) 10-6532-1921; Fax (86) 10-6532-4978 -- Email: beijing.newsroomreuters.com newsalert.com