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To: patrick tang who wrote (14225)	8/16/1998 12:48:00 PM
From: Moonray	Read Replies (1) \| Respond to of 25814

DVD Replication to Reach 1.28 Billion Units by 2002; International Recording Media Association Releases Exclusive Sales Statistics at DVD Production '98 PRNewswire - Thursday August 13, 10:26 am Eastern Time Company Press Release SOURCE: International Recording Media Association UNIVERSAL CITY, Calif., Aug. 13 /PRNewswire/ -- The International Recording Media Association (IRMA) released exclusive sales forecasts on the growth and worldwide expansion of the international DVD marketplace at the DVD Production '98 conference here yesterday. According to IRMA's Worldwide Optical Media Intelligence Report, annual worldwide DVD replication will reach 1.28 billion disks by the year 2002. The numbers are part of the industry's most definitive study on the growth and direction of the world optical media marketplace, which contains statistics on all current and emerging optical formats. In his speech IRMA Executive Vice President Charles Van Horn explained to an audience of over 300 DVD production professionals, ''We are obviously in the audience-building stage of the DVD marketplace. Audiences are slow to change with the introduction of new technology. An educational process is always needed. Look at 2002 as only the beginning of the format's introduction to the consumer mass market.'' Even though it's only a ''beginning,'' IRMA's statistics chart a rapid rise for DVD during the next four years as the format establishes a strong consumer niche for itself in video, ROM audio, and blank recordable applications. Other statistics released in Van Horn's presentation include: -- North American DVD Video replication will be increasing from 40 million units in 1998 to 183 million units in 2002. -- Worldwide DVD Video replication will reach 64 million units this year and should grow to 430 million units in the year 2002. ''Of course, DVD Video is a rather small marketplace in comparison to VHS, but as the first true convergence entertainment product the potential, according to our statistics, is tremendous,'' Van Horn added. Van Horn's presentation documented a strong ''lift-off'' for the new format, which offers tremendous opportunities for producers of content for DVD. According to IRMA statistics, consumers are embracing the format at a strong rate, with over 800,000 DVD Video households this year in North America, which is expected to grow to 8.6 million households by the year 2002. The growth of retail outlets will also propel the demand for DVD Video product. IRMA projects that the number of stores selling or renting the new format will increase from 5,000 outlets at the end of 1997 to more than 12,000 by the end of the year. ''Sensible retailing and marketing will make DVD more apparent to all consumers -- not just early adopters -- who are acquiring DVD Video programs at an annual rate exceeding VHS sell-through buy rates, of 15-20 DVD Videos versus 10-15 VHS videos.'' Van Horn encouraged the Hollywood community to ''emphasize the entertainment content and potential of DVD and not confuse the consumer audience with a technology story. In order to build the audience for DVD we must develop new and innovative programming that truly communicates the value of the new DVD format to its audience. IRMA, the 28-year-old association with 450 member companies throughout the world, serves as a forum for the exchange of management-oriented information on global trends and innovations which drive recording media. o~~~ O

To: patrick tang who wrote (14225)	8/16/1998 1:13:00 PM
From: Jock Hutchinson	Read Replies (2) \| Respond to of 25814

Patrick: I am not so sure that LSI is that strong in DVD for the box. I recall Wilf saying that they had just started production on their first DVD chip for a box at the 1Q CC. I will check into it. One other take on the value of the Symbios purchase: pubs.cmpnet.com The above link has been cited here on at least two occasions, but not as it pertains to Symbios, and some further interesting information can be derived: 1. In 1997 Symbios had a higher percentage of its sales in Standard Cell business than LSI--approximately 66% to 54%. And while not all standard cells are the same, and Symbios has been characterized as a semi-custom chip maker, it is pretty clear that the Symbios product line is in the growing area of ASIC technology, and as a result will help rather than hurt LSI product mix. Indeed, Symbios' higher percentage of standard cell business should further lessen the blow that LSI is sustaining with its diminishing gate array business. As Shane has written, "Bad" LSI is disappearing, and "Good" LSI is growing at a rate of 30%, except that now "Good" LSI has just gotten 36% bigger in sales. with a lesser increase in "Bad" LSI sales. It would be interesting to discover the duration of the effective contract for a standard cell customer versus a gate array customer, both in terms of individual product and further customer business. Obviously, one of my standard themes is the more advanced the technology, the longer the relationships with a customer. 2. If combined, the Standard Cell business for Symbios and LSI would have made the new LSI the world's second leading provider of standard cell chips with $1100 Million in sales. Only Lucent would have had more sales. Since Lucent had a much smaller percentage of its business in the gate array market, the overall growth comparison for Lucent chip sales was much more impressive because gate array is clearly a declining business. By mid '99 LSI will have a similar product mix that will enable year over year comparisons to be much more favorable. Here, it would be interesting to discover the percentage of gate array business that "moves up" to standard cell business as opposed to the gate array business that goes elsewhere--either to gate array or another type of product other than standard cell. 3. The combined growth rate for the two companies in Standard Cell sales would been 33% in 1997. Anyway you look at it, this figure holds great promise for the future--especially for the Symbios division with its limited international exposure. Furthermore, an uptick in the semi business should have a two fold effect on LSI-the first of which is that per se, an uptick will mean more business. The second positive effect is that a semi uptick will spur the perception by potential Standard Cell LSI customers that the time is right to move to LSI's hard wired designs as opposed to PLD etc., because the additional "start up" costs are now justified with the promise of sufficiently greater volume to offset costs. We shall see.