W) With a name like SLAB, it has to be good
Rated a WATCH
Reason for DD
Passed the mid-summer screen
Business
Silicon Laboratories, Inc. is engaged in the design and development of proprietary, analog-intensive, mixed-signal integrated circuits (ICs) for the rapidly growing global communications industry. Mixed-signal ICs are electronic components that are capable of processing both digital signals and real-world analog signals, such as sound and radio waves. To develop its business rapidly, the Company initially focused its efforts on developing IC solutions for the personal computer modem market. The Company is now applying its mixed-signal and communications expertise to the development of IC solutions for other high growth communications devices such as cellular telephones and network access applications. The Company is organized into two principal divisions: the Wireline Products Division and the Wireless Products Division.
Competitors
ADI, CNXT
News
AUSTIN, Texas -- August 10, 2000 -- Silicon Laboratories Inc. (Nasdaq: SLAB), the mixed-signal integrated circuit (IC) innovator for the communications industry, today announced the completion of its previously announced acquisition of Krypton Isolation, a California-based semiconductor company. The acquisition joins the industry's pioneers in silicon Direct Access Arrangement (DAA) technology, forming the world's leading source for innovative solutions that provide isolation between a communications system and the telephone network, as required by the FCC and equivalent agencies throughout the world.
July 10, 2000 Silicon Laboratories Announces Industry's Smallest SONET/SDH Clock and Data Recovery IC- Si5020 is First in SiPHYTM Family of Physical Layer Interface Products
July 10, 2000 Silicon Laboratories Introduces Optical Networking Division-
Newest Core Technology Extends Company's Focus Into Fiber Optics This new division will focus on developing the SiPHY(TM) family of high-speed physical layer ICs. The company also announced today the first product from the new division, the Si5020 clock and data recovery IC, which is a key functional building block of high-speed optical data communications systems. The product, which is five times smaller than competing solutions, provides the essential clock and data recovery function for fiber optic communication products such as optical transceiver modules, digital cross-connects, and SONET/SDH/ATM routers, test equipment and regenerators.
July 10, 2000 Analog Devices Withdraws Lawsuit Against Silicon Laboratories
June 27, 2000 Silicon Laboratories To Acquire Krypton Isolation- Silicon DAA Technology Pioneers Join Forces
June 22, 2000 Silicon Laboratories Releases Statement Regarding Analog Devices’ Lawsuit
Analysts and others
7/18/00 Silicon Laboratories: Strong Quarter; $100 Price Target
Lehman Brothers Equity Research
27-Apr-00 09:30 -- 10:00 ET
Silicon Labs (SLAB) 75 -4 7/16: Lehman Brothers initiates coverage with a OUTPERFORM rating and price target of $100. Brokerage firm initiating coverage participated in underwriting the recent IPO.
26-Apr-00 AFTER THE CLOSE
Silicon Laboratories Inc. (SLAB) 79 7/16 -1 5/16: Reports Q1 earnings of $0.08 a share, $0.01 worse than the First Call consensus of $0.09, vs year-ago earnings of $0.03
23-Mar-00 AFTER THE CLOSE
IPO Pricings : Silicon Labs (SLAB) 3.2 mln at $ 31, well above range, Morgan Stanley as lead.
3/23/00 Rated a B+ IPO from the tough Francis Gaskins. High growth market and good management. INTC and MOT are customers. Proprietary technology. INTC used SLAB due to SLAB’s expertise in mixed signal technology. As computer interface with speech and vision, this interface will be required. CXNT is biggest competitor since they make the most modem chip and came out with there own DDA. Not sure if cheaper and more programmable than SLAB. As moving up in technology, don’t need separate DSP chips. Still need a DAA (pair of chips) on every computer. Only 15% of computer cycle time with a 500Mhz processor vs. 50% with the Pentium. CMOS saves million in testing costs. They have the skill set that gives this company the potential upside. Wireless chipset also going to be a new product. Japan is the first place to use 3G wireless since out of capacity. These have introduced a phase lock loop, it synchonizes the signal in wireless handsets.
Numbers
Revs 6.3M to 7.4M to 14.5M to 19.7M to 24.3m Jun00 per daily stocks.net
EPS 0.08a to 0.10a Jun00 per briefing.com
2-Week Low on 31-May-2000 $45.50
Recent Price $67.00
52-Week High on 29-Mar-2000 $105.75
Market Capitalization $3.17B
Shares Outstanding 47.2M
Float 3.20M
Price/Book (mrq*) 25.96
Price/Earnings (ttm) 189.80
Price/Sales (ttm) 39.81
Total Cash (mrq) $105.7M
Short Interest As of 10-July-2000
Shares Short 65.0K
Percent of Float 2.0%
Shares Short (Prior Month) 32.0K
ADI comparision
Market Capitalization $33.5B
Shares Outstanding 355.2M
Float 344.6M
Price/Book (mrq*) 17.92
Price/Earnings (ttm) 74.51
Price/Sales (ttm) 16.16
Insiders
19 buys and 3 sells, but Lockup has not expired so take with a grain of salt
11% institutional up from 1% previous quarter
Internet Post
illiquidity is why SLAB is so fun - up $30 in 3 days: 7/12/00 on SI
It is a contentious topic whether communications pure-plays will be insulated during the next supply-driven semiconductor industry downturn. Fundamentally, we are optimistic that the group's low capital intensity
and design-driven character will allow it to weather the storm better than other segments. Given the relative immaturity of the group, however, there is limited historical precedent. A few factors to consider: In the 1998 semiconductor industry downturn, most of the communications component pure-plays (e.g., Applied Micro Circuits (AMCC#, 1H) Broadcom (BRCM, 1S), PMC-Sierra (PMCS, 1H), and Vitesse (VTSS, 2H)) enjoyed tremendous sales and profit growth, despite the fact that the semiconductor industry
contracted by 8%. Indeed, until a series of exogenous (e.g., Russia's financial crisis and the collapse of LTCM) and communications industry events (e.g., the Ciena (CIEN, NR)-Tellabs (TLAB, 1M) debacle and earnings misses at Alcatel, Advanced Fiber Comm (AFCI, NR), and Reltec), the comm IC stocks outperformed the SOX index and the overall market. In other words, investors appeared to have differentiated the comm IC stocks from the general purpose chip stocks. In 1996, in a somewhat different
illustration, excess customer inventories were a negative factor faced by chip suppliers of all stripes. At the time, there were only two publicly traded broadband comm IC pure-plays, Level One Communications and Vitesse Semiconductor. Vitesse thrived in 1996, driven by the dawn of the optical networking market. Level One Communications, in contrast, suffered from four flat sequential sales quarters. Level One attributed the flatness to inventory corrections at customers (we believe Cisco (CSCO, 1M) and
Hewlett-Packard (HWP#, 1M) were two major culprits). The lesson of that divergence is that customer inventories must be closely watched. Currently, inventories at most communications OEMs appear relatively well-controlled, although we will be monitoring the data from the June quarter carefully.
Our point is that the historical track record is limited: 1998 provides a comforting view, while 1996 highlights a possible risk factor (i.e., customer inventories). On balance, we believe the communications IC
pure-plays such as AMCC, Broadcom, Centillium (CTLM#, 2S), Galileo Tech (GALT, 1S), PMC-Sierra, Silicon Labs (SLAB#, 2S), and Vitesse Semiconductor should remain fairly good performers should the
semiconductor seas get rough. 7/6/00 on GTR
tejek - SLAB revenue growth did not decrease Q2Q, EPS did, and that was because of increased spending on R&D and to acquire top talent. EPS last quarter was a 33% surprise, future long-term growth looks solid IMO. And, with the ADI suit dropped, the short-term looks bright as well.
I was not clear in my post. What I meant was that the rate of revenue growth YOY slowed from 400% to 200%. Certainly fast growth but also a steep drop in the rate. 6/27/00 on SI
``Hand-held computers represent a $2 billion market in 2000, growing at a compound annual rate of 27 percent,'' said Will Strauss, president of Forward Concepts. ``Although only an estimated 25 percent of hand-helds shipping this year will be equipped with modems, a growing percentage will incorporate the functionality as both sizes and prices of hand-held-specific modems fall. Forward Concepts forecasts that the number of modem-equipped hand-helds will grow at a 58 percent compound annual growth rate, as over half of the projected 26 million units shipping in 2004 are expected to include modem functionality.''
6/13/00 on SI
Silicon Laboratories flew up 43, or 187 percent, to 66 Friday in its initial public offering after pricing its shares at $31 a share. 3/24/00 on SI
Chart
Recent gap up on June 15. Two big green days this quarter. Very low volume on recent rise. 7 out of 8 days are green but volume under 100K.
Link
silabs.com
Summary
A sharp rise due to the ADI run-up. This float is ridiculous. Institutions cannot buy without jacking the price up. $15 short term downside and $30 upside. ADI at its high and technically a better buy, but I cannot ascertain the technological superiority between the two. Message board at yahoo is verbal war and wasting space. RB is better but very little of substance. Only two analyst following it and 0.11 predicted for Sep00 and 0.12 for Dec00. Momentum players out of this as low volume attests. Gaskin vcall session best intelligence out there. Lehman is involves in this IPO so that is a negative since their KOREA fiasco.
ADI and SLAB not on the same FY. ADI Jul00 quarter had 21% increase in revs. SLAb had 23%. ADI pre-announces upside so I figure that SLAB is probably right behind too.
Another one to sleep on.
Jack |
