To: Moonray who wrote (16728 ) 1/29/1999 9:36:00 AM From: Jock Hutchinson Read Replies (4) | Respond to
Luna Beam: What I found particularly intriguing is the emergence of the Mint technology design services. I will be putting in a call to LSI IR in the near future to learn more about the capabilities of Mint, but for the time being I am assuming that Mint has at least somewhat the same capabilities as Cadence and Synopsys, which is to say that LSI is now somewhat a player in the Fabless semiconductor industry. Obviously this area will show growth rates far in excess of what the semi industry growth rates will be in the foreseeable future, and it would not be surprising to see Mint grow at a rate of 50% (WAG) for the next five years, since Mint is starting off with a very small revenue base. If Mint has or will have the independence to design outside of LSI (i.e. design for companies that will not be using LSI for it final product), this provides an excellent hedge for LSI. Moreover, if MINT continues to grow, then it will be an excellent spin-off candidate. As I recall, MINT was purchased for something like 15 Million, and I suspect that its purchase price is where they will keep it on the books. In fact, with its current projected rate of growth, it could easily be spun off at a dollar a share in four to five years (again WAG). For that matter, there are a lot worse places to be than headquartered in the leading independent SOC company's headquarters. And at some point in time, the street would began to accord LSI a higher multiple because of Mint. (By contrast, the street will clearly accord LSI a lower multiple of part of the storage business.)Obviously in a fantasy world if Mint becomes another Cadence, then its market cap will surpass that of LSI. Now this is fantasy talk but it really is another hidden asset play of Wilf who is vitally interested in this area of the semi business.
