Upgrade from CSFB based on Softcom acquisition:
July 8, 1999 - 7:18am
Credit Suisse First Boston Corporation
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CSFB Tech Daily
Thursday, July 8, 1999
www.tech.csfb.com
CTN 274.11 -0.60 -0.22%
Intel Corp. (INTC-$64 3/8-Cap $214B-Buy) Charlie Glavin
Softcom Acquisition Provides Big Boost for Intel FY99E: $2.25: FY00E: $2.55
* INTC stepped up its acquisition activity with what we believe is the very attractive purchase of Softcom Microsystems, a private network processor chipmaker, in a non-disclosed, all-cash transaction.
* Neither a fabric nor a framer, Softcom's products sit between the two, attempting to put operations that were typically done in software, into hardware. The current platform, the Gigablade, can support multiple gigabit speed interfaces, such as SONET and ATM.
* Target customers include Gigabit Ethernet switching and carrier access platform vendors (especially in the broadband space), server/Storage Area Networking vendors and very high- end, backbone router vendors. Targeted first tier customers include Cisco, Lucent and Nortel.
* A relatively new market, we estimate that this market could exceed $750 million by 2002.
* We view this acquisition positively, in that it provides INTC with greater Layer 2/3 (and above) expertise, complementing the Layer 1 capabilities that Level One brings to the table and that it further affirms Intel's move into the higher-growth, communications IC market.
* In a separate announcement, the proxy for the Level One and Intel transaction was released, with LEVL's shareholder's vote scheduled for August 8th. |
