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

To: Tony Viola who wrote (15249)	9/24/1998 8:00:00 PM
From: shane forbes	Respond to of 25814

Tony: RE: Quite a few articles out lately about semis bottoming now or soon and picking up with a vengeance next year sometime. Well OK, what are the prognostications about LSI stock price rising from the ashes My usually contrarian opinion is that LSI will not go up substantially in the intermediate term (within the next 2 months) because of anxiousness with the new plant and possible excess capacity and confusion with Symbios, will be range bound 12-18 until Jan., will go up in Jan. when presumably LSI will back in the fab utilization going up game and will sit around 22-24 by March and then barring any distractions will be at 30 by the end of the year and considerably more if the shortage predicted does materialize (say $35-40)... [proviso: If the world is coming to an end (China, nuclear war, hurricane Lourdes, Rambo etc etc) we will see single digits but then will it really matter anyway? <g>] all highly susceptible to crap thinking and more than likely all will be wrong... --- A very interesting article about LSI (at least the COMPANY is respected- the stock on the other hand is hurting): ---- LSI takeover of Symbios troubles some customers Erik Espe Business Journal Staff Writer LSI Logic Corp.'s announcement that it intends to purchase Symbios Inc. from Hyundai Electronics America doesn't sit well with everyone. Symbios is a leading designer of small computer system interfaces, or SCSIs (pronounced "scuzzies"), which enable personal computers to communicate faster with peripheral hardware such as disk drives, printers and CD-ROM drives. LSI, meanwhile, produces custom-designed semiconductors--and some of its customers are companies that build SCSIs. One of those customers is crying foul. San Jose-based Initio Corp. is in an awkward position: A company it was sharing technology with as a customer is suddenly purchasing a major competitor. Initio claims LSI has access to its SCSI production technology because it has contracted with LSI for eight months to help produce its chips. In addition, Initio CEO Sassan Teymouri said the two companies had been in negotiations for LSI to license some of Initio's core technologies. But after LSI announced its intent to buy Symbios, "they went cold," he said. Mr. Teymouri said his company also is worried about doing business with a firm that will soon be its competitor. Kevin Brett, a spokesman for LSI, said his company is discussing the issue with Initio. "We have been proactive and reached out to Initio and other firms that are affected by the planned acquisition of Symbios," he said. "We see them as a customer. We're certainly very cognizant of that fact." LSI's proposed takeover of Symbios has yet to be approved by the Federal Trade Commission, but "we are confident that this will come to pass," said Mr. Brett. He said it isn't unusual for Silicon Valley firms to do business with those they compete with, and he doesn't believe Initio should feel uncomfortable as a customer of LSI. "The relationship LSI has with IBM is that we are a supplier, a customer and a competitor," he said. "If you go throughout the entire valley, you are going to find situations that are similar." Mr. Teymouri said his company, like many SCSI manufacturers, has "depended" on LSI. In addition to hiring LSI to custom-build chips for its SCSIs, Initio licenses intellectual properties from LSI that it says are necessary for the production of its SCSIs. Now that LSI is poised to purchase a competitor, Mr. Teymouri isn't sure where to turn to license the IPs Initio has come to depend on. Usef Vazir, Initio's technical marketing manager, said his company can't be expected to buy licenses from a company that will soon be among its biggest competitors in the SCSI chip market. "We would have to be sharing product information that would be targeted to their customers as well," he said. But Mr. Teymouri said he doesn't know of any other companies from which Initio can license a number of different, compatible IPs. While IPs that perform various functions can be found from a variety of companies, only LSI made them available in one place--and only LSI's were compatible with one another. [VERY INTERESTING IN THE WHOLE SCHEME OF THINGS hmmm... means that the WHOLE is worth much more than the SUM OF THE PARTS.] "We were depending on LSI for two key projects," he said. "We will finish with LSI on those projects anyway. It's too late in the game to switch horses." Mr. Brett conceded that other companies have contacted LSI with concerns similar to Initio's, but he wouldn't divulge their names. Officials at QLogic Corp., a Costa Mesa-based producer of SCSIs that Mr. Brett said has a relationship to LSI similar to Initio's, would not comment on the issue. Mr. Teymouri said companies like his will soon have to find another custom chipmaker. "Short term, the impact [of the Symbios takeover] will be nothing," he said. "Long term, we will need to look for alternatives for resources." ---- initio.com ---- Shane.