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

To: M. who wrote (14711)	9/2/1998 2:47:00 PM
From: patrick tang	Respond to of 25814

Not only that, but who is going to fork over $400 to $500 (remember, not much economic of scale) for a DIVX player when one can get by with a $125/150 add-on DVD PC card. The extra $300 pays for a lot of movies. The only way I think 'DIVX' can make sense is if one can download through high speed portal to watch once and pay extra to watch again. That eliminates the trip to the store altogether. But even then I would only go for that if I don't have to pay $400 to $500 for a specialized player but can do it all on my 'PC/TV'. With regards to LSI and DVD, the 'threat' that I can see is cheap chips from Taiwan. LSI has to be ready manufacturing wise to compete in price. When the volume is there, Taiwan Inc. will be there bombing the price. However, the good thing is the earliest chips will most likely come from fabless design houses who have to pay the foundries first. Hence LSI, if their own fab is as efficient as UMC or TSMC, will make the margins on maufacturing that those foundries take in. Translated, in the case of a price war, LSI's margins may drop, but should not drop below the foundry margins. patrick