BRCM article rereviewed....Internet Stock News Announces Investment Opinion: Broadcom: At the Core of Broadband
SAN DIEGO, Sep 20, 1999 (BUSINESS WIRE) --
INTERNET STOCK NEWS: Sept. 20, 1999
"Broadcom: At the Core of Broadband" by Marc Szem, ISN Writer
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The entire Broadband market has been gaining momentum all year.
Broadcom Corp. (Nasdaq: BRCM) has been benefiting from this movement.
Broadcom is one of the leading providers of high-speed transmission and
networking equipment. They design and manufacture integrated circuits
for Broadband communications. The make key technology that enables
high-speed transmission of data, voice, and video. Broadcom's product
lines cover high-speed communications devices for TV set-top boxes,
cable modems, digital satellite receivers, xDSL receivers, Broadband
data transmission devices, Fast Ethernet networking devices, and
high-speed home networking devices. Broadcom products work over
existing network infrastructure such as coaxial cable and twisted-pair
copper lines. They have significant market share in all of the markets
that they target.
Competition for Broadcom has been mounting on all fronts. Intel Corp.
(Nasdaq: INTC), National Semiconductor (NYSE: NSM) and Motorola
(NYSE: MOT) have entered into the high-speed transmission and device
market. In August, Intel unveiled its new line of high speed networking
chips that are similar to Broadcom's networking chips. Intel has a
strong brand name in the PC sector and could become a major threat to
Broadcom. National Semi offers a set-box processor called Media GX.
America Online (NYSE: AOL) selected the Media GX processor for their new
set-top boxes. National Semi recently turned the focus of its Cyrix
division away from PCs, towards telecommunications and high speed
networking products. The shift is not surprising when you consider the
recent decline in chip prices and gross margins inherent of the PC chip
sector.
Motorola has taken a giant step into the TV set-top box market. On
Wednesday, they announced that they would merge with leading TV set-top
box manufacturer, General Instruments (NYSE: GIC). Additionally, they
recently received certification from Excite@Home (Nasdaq: ATHM), for
Motorola's new cable modem. This means that Motorola's cable modem is
approved for use with the Excite@Home Internet service. Broadcom's
stock was hit hard on the merger announcement because General
Instruments is one of Broadcom's top customers. The reaction seems a
little severe since Broadcom sells its products to Motorola as well.
Only a few of Broadcom's products compete directly with Motorola's
current line of high-speed products. Broadcom's stock is up almost 200%
since January and trades at a hefty, 150 times 1999 earning, so the
stock was due for some profit-taking, but business for them is not as
bad as the recent stock activity would have you believe.
Broadcom has a wide variety of products for high-speed data
transmission. They continue to grow and innovate their product lines.
Their new StrataSwitch chip performs the work currently required by 10
separate chips, using Broadcom's multi-layer switching technology. It
can receive, prioritize, and forward packets of voice, data, and video,
at high speeds, over existing corporate network infrastructure.
Broadcom has been building its brand name in the Broadband transmission
market and is well respected in the industry. This is reflected in
their customer list. Other customers, in addition to General
Instruments and Motorola, include 3Com (Nasdaq: COMS), Nortel (NYSE: NT),
Cisco (Nasdaq: CSCO), Scientific Atlanta (NYSE: SFA), and Panasonic.
Obviously the industry giants are seeing an excellent opportunity in
the emerging market of Broadband circuits and devices. However, it may
take a while for the competition to close the technology gap separating
Broadcom from the rest of the pack.
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