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

To: Tony Viola who wrote (18381)	5/9/1999 1:56:00 AM
From: patrick tang	Respond to of 25814

Tony, thanks for a good one! No wonder Wilf been out touting the company since the Jan earnings and even doubled the efforts after April earnings! Did he also have a cat's grin on his face at the stockholders' meeting? Symbios doubling every 18 months! Wow! So the news that storage is growing 70% a year clip is also true. 3 year bull run in semi! That might just take us to the magical $100/share! No wonder the stock's been holding steady and even up a little the last week while Naz dropped! Thanks one more time for the update. patrick

To: Tony Viola who wrote (18381)	5/9/1999 11:01:00 AM
From: Wolf 2	Respond to of 25814

Tony: Thanks for the excellent precis! Tell your wife that her spouse has as much of a 'pendantic streak' (in a good sort of way, he hastens to add<g>)as Mr. Corrigan. As a dyed-in-the-wool non-techie, I found your notes refreshingly comprehensible...but had to laugh at this comment: " One about Moore's law, O.35 to 0.25 to 0.18 micron, # gates on a chip going from 1/2 million in '94 to 26 million in 1999, etc. (with 0.18). Boilerplate." Was any mention made of the potential impact on sales/margins as a result of the accelerating unpleasantness in Sino-American relations and the possibility of a trade war with Japan? Regards, Wolf

To: Tony Viola who wrote (18381)	5/9/1999 12:43:00 PM
From: Jock Hutchinson	Read Replies (2) \| Respond to of 25814

Tony: A truly excellent report. Interesting that he presented some fresh material not used in either previous CCs or annual report. How about CDMA work? Wilf said LSI's CDMA chip, with DSP plus mixed signal plus the microprocessor core, is more integrated than Qualcomm's This statement makes Wilf's previous statements of "The party's about to begin." look positively tepid. I mean there is exuberance for your product line and outright craziness. If Wilf is right and LSI maintains its lead, simply enormous profits will be made. . Copper chips from LSI? LSI has concentrated to date on getting lower K dielectrics for the G12 process, giving faster transistor speeds. They think this yields better performance than copper would to date. This is the same course taken by Intel so far - my ed. LSI will do copper on G13 or G14. Again, same strategy as Intel, if G13 or G14 are 0.13. because Intel is going to copper for 0.13. Here my concern is that somehow LSI could hit a serious bump in the road, since it is very likely that its main competitor in the CPU field--IBM Microelectronics--is clearly ahead of LSI. This was a grossly incomplete answer that does not assuage my concern as a shareholder, since it does not answer any questions regarding its current stage in R&D, the overall expense in bringing it to market, the feasibility of project complexity, and the time period required to bring it to market. Question: will FPGA eat into LSI's cell based business? No, cell based ASIC is in the 60s % wise now, FPGE 20s, same in 2001 or so. On this question, I would like to hear if there was any detailed discussion as to how he arrived at this conclusion. Moreover, I am not quite sure as to whom or what these different percentages refer. Clearly ASSP/PLD/FPGA is an area where one very serious battle is being fought, and I would really like to get a feel for the landscape of the business, since a great deal of LSI's future success will be determined by its versions of "off the rack" chips. In particular, your comments and the comments of others who are knowledgeable (Patrick, etc.) would be most appreciated. . Don't quote me on this one. Gresham 8" wafers. Wilf, sounding like he was kidding but he was serious, said LSI would like to be about tenth to go to 12". Intel has said they don't want to be first either, so who is it going to be? IBM? I am not sure I understand the above paragraph. To which sentence does the "Don't quote me on this one" sentence refer? Also, when Wilf said he would like to be the tenth to go to 12", I assume that he would be just as happy to be the ninth or eleventh as tenth--in other words he doesn't want to anywhere near first. If so, that's an interesting insight into the semi equipment business. Article in this week's Barron's with a negative spin on the business. Wilf, 'fabless can turn into chipless in a capacity crunch.' Laughter. Unless of course you are semi market savant Erica (My Daddys Owns a Big Brokerage) Klauer--in which case according to Ms. Klauer, LSI will gets its head handed to it and be a poor performing stock from the price of $12, going forward. (Now that's talent--to downgrade a stock that for at least 1Q '99 was the top performer of the S&P 500.) Is it possible that high level ASIC fabless competition is an idea whose time has come and gone without any significant fruition? We shall see, but I always liked LSI's little Mint Technology division as an excellent start at hedging the bets. Moreover, it would appear that recently Wilf has begun hedging his bet as it seems that he is beginning to consider offering LSI's services as a foundry and is also thinking about farming out some of the low end work to foundries. With such a dynamic market, I think that in the interim period of three to five years, the most likely scenario is that various combinations of fab--yes and fabless will be tried. Thus, as I look at your report, my most serious area of long-term concern is the cuts in R&D that were made during the recent restructuring and the uncertain move to CU. But on the margins, I liked what I saw a lot more than what I didn't like, and I am very much convinced that the good times are here. <OT> And yes, tech world, you heard it here first. Mr. Anthony Viola was the first to coin the legendary phrase "Fab-Yes". While Mr. Viola originally intended to describe a type of production method in the semiconductor industry, the phrase "Fab-Yes" became THE catch phrase for the the emerging dynamic hyper optimistic asexual trans-gendered, trans-continental techno generation of the new Millennium. Unfortunately, Mr. Viola failed to take legal efforts to protect his newly minted phrase, and never made a dime off of his contribution to 21st Century pop culture. Previous to this, the only similar contribution Mr. Viola made was having a type of donut served in the Amdahl Corporation's cafeteria named after him as the phrase, "I don't have time for lunch. Just bring me a Boston and a Tony" often resonated throughout Amdahl's corporate suites.

To: Tony Viola who wrote (18381)	5/9/1999 12:53:00 PM
From: Jock Hutchinson	Respond to of 25814

My wife said he'd be an excellent teacher, because of the way he can explain tech stuff to non tech people). Tony: Somewhere on the Internet is the story of semi pioneers, which of course includes Wilf's story. What I remember the most about Wilf's story was his first job in America where he was sent by his employer to the company library to read up on semiconductors and there was a couple of books in total. My point is that Wilf has truly learned his business from the ground up and as a result, truly has the ability to explain his products at even the simplest level since that is where he began of the learning curve.

To: Tony Viola who wrote (18381)	5/9/1999 1:41:00 PM
From: akmike	Respond to of 25814

Tony-Many thanks for sharing your notes. Great news on Symbios! It must be getting pretty hard for anyone not to acknowledge that Wilf made a very astute purchase there. It appears that he purchased a business in 2H of 98 at a price of about 2/3 revenues for calendar 2000, and growth prospects going forward. Hyundai needed cash but if they had put that cash into LSI stock they would have 3 times as much today. Best regards, Mike

To: Tony Viola who wrote (18381)	5/9/1999 3:51:00 PM
From: E_K_S	Respond to of 25814

Great report Tony ! - Was there any indication that LSI was going to build a 2nd FAB next to Gresham I? It will be interesting to watch how overall bookings grow and exactly what decisions management makes regarding terminating older facilities and bringing on newer facilities. It takes solid management and a great technical team to bring up and fine tune a new facility .... it sounds like LSI's team there in Gresham is doing an excellent job. The marginal revenues will increase as newer more efficient systems are brought online and the older (less efficient) facilities are closed. Not only are the revenues going to grow because of the uptrend in the cycle BUT LSI is going to get more efficient (over time) and as a result the earnings per share should increase at a faster rate. If the market recongnizes this, then the overall market PE could be expanded to reflect these new efficiencies. I have always used a PE of 20 for valuation purposes...maybe a PE of 23 or 25 is more appropriate. EKS

To: Tony Viola who wrote (18381)	5/15/1999 1:38:00 AM
From: rairden	Read Replies (2) \| Respond to of 25814

Shareholder meeting --- my stale notes... I too attended the meeting last Friday, but you provided a great summary before I could find time to write up my own notes. (Drove to Reno for the weekend to get any gambling urges out of my system.) Agree very positive meeting. Listening to Wilf is always a treat. Back when the meetings were in Milpitas I usually showed up. I'll vouch for the accuracy of your note-taking anytime. There's nothing of substance for me to add. My estimate of the attendance was about 130 people, of which maybe one third were LSI employees. Their ten displays and demo's around the back of the room: SGI workstation, HP Scanjet 5200C, Xerox 265 digital copier, Sun Ultra workstation, Metastore workgroup storage system, PCI RAID system, PlayStation 2, L6402X single chip DVD decoder, DCAM 103 single chip image processor, and single chip CDMA baseband processor; plus knowledgeable employees to explain it all. Wilf's discussion of the industry and LSI highlights did last exactly 45 minutes. The question and answer session went on another 45 minutes. My understanding of Gresham remarks is that $1 billion has been spent so far, and the $4 billon number referred to the total after the "next few years". Unclear whether that includes any work on the additional three fabs that they have room for. I don't know where Wilf got the idea that 320 acres was 10 percent of Gresham. Maybe he meant 10% of the industrial acreage. ( reference-- ci.gresham.or.us , Gresham area is 22.5 square miles = 14400 acres, 4th most populous city in Oregon.) Comment that the next two or three years should be very good -- last time I heard Wilf being this confident of the future was the annual meeting in 1992 when he told a disgruntled shareholder to just hang on for a couple more years to be richly rewarded. 20-fold appreciation followed in the next 40 months. LSI appears to me to be even better positioned this time around. The Japan fab is 6-inch wafers at 0.35 micron, high volume. They thought they could shut it down by now, but demand is still strong. Wilf said they would close it maybe in fourth quarter. Also said they are still undecided whether next fab in Gresham will be 8-inch or 12-inch; here's where the statement about wanting to be tenth to adopt 12-inch came in. A three minute video about the Gresham plant was shown. The figure of 65,000 square feet was given; I guess that's the cleanroom area. Page 17 of the 10-K gives Gresham area as 532,400 sq ft over 3 buildings. Plenty of impressive equipment, but the only piece I could identify was a Semitool oven. The locality was referred to as "Silicon Forest". Plenty more notes, but I'll quit here. My bottom line feeling is to keep all my current shares as a core position (longterm tax-wise), and grab more on any market downturn for those technical trades that so many on this thread are fond of. Another 6 months and LSI may overtake Cisco as my largest holding; it's getting to be a close race.