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

To: uu who wrote (14739)	9/3/1998 4:09:00 PM
From: shane forbes	Read Replies (5) \| Respond to of 25814

Addi: That's a downer. The fabless/Cadence threat is the biggest problem. Combine this with with the current overbuilding in the foundry sector and the consequently dirt cheap foundry wafers and there is clearly a problem if what Ms. Klauer says is true. I had thought this would be a factor sometime over the next generation not now. If you recall I have said that I will holding LSI only over the next generation and then no more - one because at that point costs will be too high to build or refurbish fabs and two this very very real threat of Cadence or an IP vendor providing the "intelligence" + a foundry doing the manufacturing (these guys esp. TSMC and Chartered are turning around designs very very fast). --- I think the Japenese Yen thing does not affect LSI nearly as much as she implies. ---- Besides by buying Symbios LSI is now much closer in size to STM for example (ok LSI is about half the size). The Symbios buy also gives LSI several hundred design engineers - that would put LSI around 2000-2500 design engineers or so. I think Cadence has built it up to around 1000 or so. ---- As for VLSI remember that they too have outsourced and will be "outsourcing" much of their manufacturing (I think). So VLSI may eventually be an IP based vendor and they may be OK. ---- And LSI if a bit lucky will be an STM type company. Finally remember that this is not as easy as Erica is indicating in her note and there are enough benefits to vertical integration (LSI is vertically integrated contrary to what she might have implied) (benefits: such as quicker turn around - theoretically, a uniform library, faster testing etc) and most importantly there are plenty of systems around that will be converted to one-chip implementations over the next few years that LSI will have a place over the next 3-4 years. After that I'm not so sure... ---- Unless we just got caught in a time warp and the future just came racing back and Cadence/Foundry or Artisan/Foundry are much more real threats than I had originally believed. ---- If you remember in that note about LSI that I wrote for Silicon Investor I did mention that longer term this is a real concern... I'm hoping that in spite of what Erica Klauer says longer term is 3-4 years and not today... ----