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Ben, here's some info from VTSS's 95 Annual Report. They make high speed communication and test equipment ICs from gallium arsenide chips, which run several times faster than their silicon equivalents. These chips are used in high speed communication systems ( 2.5 - 10 GB/s ! ) such as long distance fiber optic transmission systems used by ATT, Ericsson, Alcatel, and in Japan. This commercial need is fueled by the world wide demand for e-mail, Internet, and fax hardware systems, as well as data communications ( I think there are defense applications for this ) . They have 60% of the market share of this type of product, have increased shipments to major clients in the past six months, and have record order backlogs for the first half of 1996. Their product is used in ATE ( automatic test equipment ) products for Teradyne, Schlumberger, Credence, and Teradyne. You might check out the " health " of these major clients of VTSS. The 2nd quarter 96 looked great, with record revenues and profits. Sure, they will take it on the chin with the rest of the tech stocks whenever the big Correction happens this year, but I believe this company has tremendous long-term potential. |
