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

To: patrick tang who wrote (18641)	5/31/1999 4:33:00 PM
From: Jock Hutchinson	Read Replies (1) \| Respond to of 25814

Patrick: I agree with your first two points. And your primary thesis that Malaysia gives LSI more flexibility is true. But since we are not privy to the actual agreement, it is difficult to know how much freedom Malaysia has in licensing LSI's technology and to what degree they hold a license. On the other hand, I still maintain that timing a fab is extremely difficult. For the past year, you have steadily maintained that the peak price of LSI will be around Jan 2001. But given the recent drought in the semi market and the explosive potential of LSI's IP, it is very likely that the peak could come a year later. For example, as you correctly acknowledge, it is more than just timing a capacity glut as it used to be with commodity chips. Rather it is an issue of accumulating IP which is far more difficult. Thus, it is entirely possible that LSI will be far more resiliant to a downturn due to a) the fact that it might be receiving nearly 20% of its revenues from Sony again; b)its use of other fabs; and most importantly; c) the relative newness of many of its product cycles. At the very least, these arguments will increasingly appear on this thread over the next 18 months.