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

To: shane forbes who wrote (18621)	5/29/1999 11:34:00 AM
From: patrick tang	Read Replies (1) \| Respond to of 25814

Shane, 1. My view of IP is more than an idea - it's an idea that has proven to work with a certain process in a certain fab and is known to produce product. The EDMA example is one - lots of guys had that idea, but only a few could make it work. Hopefully LSI's 'idea' is workable now. 2. 'Fab' has now become a cyclical part of the business with foundry model being totally in vogue as the start-up model in the Far East. When and how much fab to build and own thus becomes a very integrated part of the business decision. I think LSI has it just right this time - owing a brand new fab coming out of the upturn-turn gate, adding that that near the end with somebody else's foundry capacity (hopefully they are not going to make actual $ investment in it though) near the end of the race, and during the next downturn, using all the abundant foundry capacity availiable out there and then building again during the next down-turn. Owing a fab definitely can be very profitable during up-turns. TSMC was making 50% margins last time. Owning Gresham now definitely is a huge plus. I expect LSI to be rewarded hansomely for that margins and then stock price appreciation. On a side note, the Lehman summary on the analyst meeting said something that I am just now beginning to appreciate - LSI has re-structured from an ASIC vendor to a general semiconductor company with six product divisions that each has its own product, markets and product road-maps. I think once that begins to bring in margins as well as recognition, the stock price will move from average to more near peak multiples like a lot of other semi companies just as predicted in that report. patrick