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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Phaedrus who wrote (4572)	10/7/1998 9:49:00 PM
From: DanZ	Read Replies (1) \| Respond to of 6565

Phaedrus, <In this environment, I think it pays to be a fabless company and sub out the manufacture to a foundry.> This is true, but how long will the current environment last? Companies who make major strategic decisions such as being fabless or not based on every up and down in the business cycle won't make it in the long run. Funny, this is just the opposite of my investment strategy which is to try to buy and sell with every up and down in the stock. :o) Ron, Thanks very much for your input. I agree that money flows have not been all that great this week but I am not going to preempt a move in the stock. This is one of those times when the market will have to take me out. The bid got to 7 briefly today and the size was rather large, 11,700 shares. It's unusual for the bid or ask size to be this large on VLSI and it was large the last time it got to 7 also. I don't like to use physical stops on Nasdaq stocks partly for superstitious reasons and partly because I don't want to show my hand to market makers. I will likely bail on my position in parts if it trades below 6 7/8 but I will use market or limit orders rather than stops if it gets there. I may or may not even enter the orders depending on how the stock and overall market looks at the time. Dan

To: Phaedrus who wrote (4572)	10/8/1998 2:09:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 6565

Phaedrus: I would not include debt in that calculation since that is the company going out of business valuation and I am not so sure that things are that dire. As far as foundry capacity being available for cheap remember that there is foundry capacity and then there is foundry capacity! If I have a 0.25u design then it matters not to me to have 0.50u capacity in spades! Look at some of the 0.25u fabs - NSM's is running at full tilt, LSI's is running "pretty much" at full tilt, UMC or Chartered says their 0.25 is being used up pretty well. The question therefore is how much of VLSI's capacity needs to be very high end and that unfortunately I do not know. I know LSI needs the very high end capacity and soon (though I'll find out how soon next c. call!). Not sure if I buy the entire fabless model for the bigger chip companies with lots of single source products. I think it pays to have some control. Clearly, it is a good model for smaller companies or those with lots & lots of standard products and I think it actually makes some sense for VLSI now but not when they get their really high end designs going. It might be too risky at that time since the high end capacity may simply not be available when the customers need it and that is what I call a real serious problem for the future longevity of any ASIC/SOC/highly-customer-design-intensive chip company. Shane.