Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: patrick tang who wrote (14969)	9/12/1998 9:10:00 PM
From: Grand Poobah	Respond to of 25814

Jock, To really tell you how LSI is doing in its design mix, I would have to have inside knowledge, which I don't. However, my feeling from seeing their offerings in DCAM, DVD, Fibre Channel, the Cisco chip, et al., is that they are going in the right direction and headed for more success than failure. I believe LSI has extensive and unique expertise for which customers are going to be willing to pay a premium, and that they are likely to be able to maintain their unique advantages. I believe the Symbios acquistion is an important good step in that direction. However, as you well know, the semiconductor industry is highly competitive, and you cannot stay ahead of the curve unless you are constantly improving and innovating. From all indications that I see, LSI has overcome their stumbles of a year or two ago with CAD tools. The EDA companies are doing a better job these days of supplying those tools to the industry, such that this hopefully will not be as much of an issue in the future. My standard cell argument certainly applies to other standard cell makers, although I know even less about LU and TXN and certainly IBM than I do about LSI. These companies appear to have certain expertise (among perhaps others, LU-telecom, TXN-DSP, IBM-fab process) that they are using to augment their standard cell offerings and are not depending on standalone standard cell designs. Regards, G.P.

To: patrick tang who wrote (14969)	9/12/1998 10:26:00 PM
From: Grand Poobah	Read Replies (2) \| Respond to of 25814

Patrick, I could swear I responded to you already, but now my post doesn't seem to be on the thread, so I will try to reconstruct it as best I can. Anyone else happen to see it flying across the ether a couple hours ago? Basically I said that I purposely did not address LSI's future revenues, earnings, or stock prices, because that is better left to others on the thread who are more of an expert than I in that area. Hopefully they will take what I have written and comment on it. To restate what I said more simply and concisely, there are several design strategies available to semiconductor companies. The low end is to make a quick and easy design, which results in a modest-performance chip. This is fairly easy to do; hence, there may be (and in time will be) a lot of competition, leading to low margins. The other extreme is to do a complex chip design, requiring intellectual property and designers with a wide variety of hard-to-find expertise. This produces a high-performance chip, which customers will want and be willing to pay more for, leading to high margins. However, this approach is fraught with obstacles, which leads to much less competition, but can result in problems bringing a good design to market, in which case the quick-and-easy guys will win anyway. I think the more complex route is the only long-term way to survive in the industry, and it appears that LSI agrees. Whether they will succeed with this approach is still an open question, as it is not easy to pull off. Regards, G.P.