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

To: patrick tang who wrote (15501)	10/7/1998 3:40:00 PM
From: Daniel My Brother	Read Replies (3) \| Respond to of 25814

New 52 week low coming? Unbelievable! Daniel My Brother

To: patrick tang who wrote (15501)	10/7/1998 5:10:00 PM
From: shane forbes	Respond to of 25814

Patrick: The up-turn will be driven by new techonologies and products, not by older products sales coming back. That has always been the tech way. You bet! <g> Tack on some reduction in capacity and our chip stocks will be back! On the earnings effect of the Yen - I think Wilf has repeated in past conference calls that the effect on the bottom line in neutral. For further corroboration, here's a note from the notes to financial statements: "Although the yen weakened, the effect on gross margin and net income was not material as the Company's yen denominated sales offset a substantial portion of its yen denominated costs during those periods. The Company hedged a portion of its remaining yen exposure..." --- Having said that, I have shown ad nauseum that LSI is vastly different from the other semis & one of the more subtle reasons is the fact that LSI does a very big chunk of its manufacturing in Japan - I would guess at least 70-80% (really not sure what Milipitas is doing these days other than pilot lines <g>). Thus it shows lower top-line growth compared to other US based semis when the yen weakens - also a lot of customers are Japanes consumer electronics companies hence it is not true that LSI prices everything in dollars as others have commented. So with the yen weakening (or should we more correctly say the Japanese banks getting stronger - O please God may this come true! <g>) that means LSI will show some "true unencumbered by currency" revenue growth. ---- RE: DRAM - lead times are up quite a bit these days though you are likely right it will go down as we proceed through this quarter. ---- Finally for the general industry, semi sales automatically look robust when the yen weakens and we can notch up the growth rates for next year up several more basis points (I will guess from the current 11% to maybe 14-15% if the yen stays at 115-125 instead of 145). People do not realize how much of chip sales growth rate is lost because of the currency conversion from the weak yen to the strong dollar. (There was a note recently where Wilf showed that industry chip revenues doing "quite well" if they are denominated in Yen as opposed to dollars.) ---- Shane.