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

To: patrick tang who wrote (15189)	9/22/1998 1:13:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

Very interesting stuff from QLogic - especially as it pertains to LSI and Symbios. (1) QLogic's recent kick-derriere highly successful FC chip used LSI's cores (YES). (2) Symbios is a competitor (duh) (3) Suggestion that foundry capacity at high end was "until recently" in short supply. (4) FC standard not "uniformly adopted" at this stage (suggesting competing standards - hopefully not. Maybe just older technologies?) ---- The Company currently competes primarily with Adaptec, Inc. and Symbios Logic, Inc. in the SCSI sector of the I/O market. In the Fibre Channel sector of the I/O market, the Company expects to compete primarily with Adaptec, Inc., Symbios Logic, Inc., Emulex Corporation and Hewlett-Packard Company. LSI Logic, Corporation recently made a bid to acquire Symbios.... Until recently, there has been a worldwide shortage of advanced process technology foundry capacity. . In particular, the Company's integrated single chip Fibre Channel controller [this is QLGC's new awesome chip] is manufactured by LSI Logic and integrates LSI Logic's transceiver technology [as if we did not know this <wink> Of course Mr. Market was clueless.]. LSI Logic recently made a bid to acquire Symbios. In the event that LSI Logic is unable or unwilling to satisfy the Company's requirements for this technology, the Company's marketing efforts related to Fibre Channel products would be delayed and, as such, its results of operations could be materially and adversely effected... Although the Company is currently not experiencing any difficulties in obtaining sufficient foundry capacity due to the current abundance of worldwide semiconductor fabrication capacity, the Company and the semiconductor industry have in the past experienced shortages of available foundry capacity. Accordingly, in order to secure an adequate supply of wafers, especially wafers manufactured using advanced process technologies, the Company may consider various possible transactions, including the use of "take or pay" contracts that commit the Company to purchase specified quantities of wafers over extended periods or equity investments in or advances to wafer manufacturing companies in exchange for guaranteed production capacity, or the formation of joint ventures to own and operate or construct foundries or to develop certain products... A significant portion of the Company's host adapter board products are currently used in high-performance file servers, workstations and other office automation products. The Company's growth has been supported by increasing demand for sophisticated I/O solutions which support database systems, servers, workstations, Internet/intranet applications, multimedia and telecommunications... In anticipation of the implementation of Fibre Channel data transfer interface technologies, the Company has invested and will continue to invest significant resources in developing its integrated circuit single chip PCI to Fibre Channel controllers. There can be no assurance that Fibre Channel will be adopted as a predominant industry standard. The Company is aware of products for alternative I/O standards and enabling technologies being developed by its competitors. The Company believes that certain competitors, including Symbios Logic, Inc., have extensive development efforts related to products based on the Low Voltage Differential ("LVD") technology. In addition, the Company's Fibre Channel products have been designed to conform to a standard that has yet to be uniformly adopted. . ----

To: patrick tang who wrote (15189)	9/22/1998 2:27:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

Patrick: Here's the reason the semi-equips fell (0.60 - that is an ay caramaba type number - but no surprise!): Semiconductor Equipment Book-to-Bill Ratio Falls in August Mountain View, California, Sept. 21 (Bloomberg) -- The book- to-bill ratio for North American semiconductor-equipment makers, a closely watched gauge of the industry's health, fell to 0.60 in August, as orders for machines used to make chips plummeted. A book-to-bill ratio of 0.60 means that chip-equipment makers received $60 of orders for every $100 of products shipped that month. The revised ratio was 0.66 in July, according to Semiconductor Equipment and Materials International, the Mountain View, California, group that reports the ratio. Chip-equipment makers such as Applied Materials Inc. and KLA- Tencor Corp. have been hurt by the economic crisis in Asia and overall weak demand for semiconductors, which has resulted in lower sales and profit. Companies like Intel Corp. and Micron Technology Inc. that make chips for computers are ordering fewer machines as they delay new plants in the face of declining sales. ''While the equipment market should see a leveling, the prospects for recovery still appear to be at least 12 months off,'' Dick Greene, an analyst at Semiconductor Equipment, said in the report. A year ago, the August ratio was 1.07. A ratio below 1.00 usually indicates a contracting market as shipments exceed new bookings. The average of monthly orders, or bookings, for chipmaking equipment in the three months ended in August fell to $632 million, down 15 percent from July and 56 percent a year ago. Shipments, or billings, fell to $1.06 billion, down 5 percent from July and down 21 percent from August 1997. The book-to-bill ratio for July was revised to 0.66 from 0.69 and indicated a decrease in orders from June, when the ratio was 0.74. --- (Dick Greene in an earlier report a few months ago when the BTB was at 0.82 said that the bottom was in place - I laughed at that! <g> - these semi-equip companies can send their employees home for a few months - there will be no work for awhile) --- (To put the average of 632 million in bookings in perspective, 632 * 12 is 7,584 for the entire year. I would guess that North American suppliers account for somewhere between 40-60% of total equip. makers worldwide revenue. Let's say that it is 50%. Then the 7,584 for N.American suppliers would mean about 15 billion worldwide. Though there is seasonality here this is a monstrous drop in capital spending ... and in case anyone forgot bodes well for the chip companies <g>) Shane.