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Technology Stocks : Xilinx (XLNX) -- Ignore unavailable to you. Want to Upgrade?

To: A. A. LaFountain III who wrote (2307)	4/27/1999 10:46:00 PM
From: Sherman Chen	Respond to of 3291

Thanks for the insightful and detailed reply. I will continue to watch this one closely.

To: A. A. LaFountain III who wrote (2307)	4/27/1999 10:50:00 PM
From: schlep	Read Replies (1) \| Respond to of 3291

Tad, i have enjoyed your posts. i would argue that the 23% growth rate is quite low for xlnx looking out over the next 5 years. it is generally agreed upon by those watching the semi's that they are entering about a 2year boom cycle. if you were to use 30% and 35% growth numbers, what would your next target price be (very curious)? then again, all this projected growth seems, to me, to be more based on the past than looking forward. the new prices of programmable logic have proven an elastic market, coupled with the vacuum forming as the asic vendors move to std_cell, all bode well for higher growth rates for both xlnx and altr. The economies of doing std cell designs also bode well for pld's. As geometries shrink, mimium lots will yield 2 orders of magnitude more die than just 2 years ago. this translates into silicon prices (not counting prices) coming closer together for plds and the smaller asics. therefore, the price difference closes even more as the geometries shrink. this provides even more revenue potential as customers shift into the pld's with their shrinking premiums choosing the design flexibility and time to market as their reward for the reduce premium. Remember, 7% seqential qtr growth compounds to 31% annual growth. Likewise, 10% sequential qtr growth yeilds 46% annual growth rate. Don't think this is unattainable, in 1995 altr did achieved just over the 10% qtr-qtr growth! So, all i wanted to do was shed some light on the series of calculations you use all based on the 23% project growth rate. Margins too have stabelized and should minimally remain there. i would have done the calculation i requested based on the higher growth rates, but your description i think was missing what you eventually multiply the compounded rates by. ie: 1.2 x ? for current base value. comments welcome and no i don't work for xlnx. schlep

To: A. A. LaFountain III who wrote (2307)	4/28/1999 11:05:00 AM
From: Lewis M. Carroll	Respond to of 3291

Tad, Assuming you are in fact who you claim to be than I ask you this: You admit that semiconductor stocks are cyclical but what you didn't cover is that more specifically with regards to the PLD industry (which for all practical purposes consists of ALTR and XLNX) is that product position is also cyclical and in about the same 4 year cycle. Follow me here - there will be a point... ALTR has just come off of a few years of significant growth (slowed by the cyclical downturn in semis but consider market share growth where the market = XLNX + ALTR - makes the math simple and everyone else combined is still noise) driven by a superior product position achieved in 1996 and continued in 1997. XLNX reversed that in 1998 and is now in a superior product position. The majority of both companies' business is telecom and networking which has average 18-24 month design cycles. This means that designs started with XLNX in 1998 will begin generating substantial revenue growth mid 1999. Virtex designs will start hitting in 2000. XLNX will see market share growth over the next 3 years. Does your research extend into a thorough understanding of the products themselves and why one companies' products they offer today are better than another's and why that will translate into market share growth which, when combined with what I believe to be the beginning of a cyclical upturn in semis, will support 30% year-year growth and possibly >30% earnings growth (advanced products yield higher margins especially when your competition doesn't have anything with which to compete!)? My personal recommendation was a hold on XLNX at 45> and a buy at <45 and if it actually does drop into the low 40s or even 30s I'm taking out a second on my house! Although I admit I did have a sell in at 58 on my entire position just in case analysts went crazy in the other direction - might as well profit sometimes!