gda, Everything that you've said can be said about LLTC.
All that I was saying is that VTSS is not just a technology company, they are developing a broad product portfolio and have a smart management with a great engineering team.
Clearly Lucent and Cisco are not small players, however, they fall into the second category "telecoms companies" VTSS's chips all go on the network side of the connection so they are subject to so many rules that they will not just be designed out to save a penny. I agree, on the consumer side of the connection, they would be gone in a minute. Look to XLNX if you want proof that you can ship high priced chips into the telecoms market.
LTX is not small, but the volume of any specific model of tester that is shipped is small, so the value of redesign is questionable, the problem is hanging on to the socket on future models.
As for my estimates of Mature revenue I can see no reason why VTSS cannot reach $800M p.a. at current growth rates they are 5-6 years away from reaching it, but it is a viable target. They have a new fab opening that will go a long way toward supporting this target.
The other factor, that seems to escape you, is that VTSS's value is not in bricks and mortar, as a BV play this stock stinks. With VTSS your investing in people and a management that is proving it can deliver. If the winning technology changes VTSS is free to change with it, if SiGe turns out to be the best for a given application, than use it. I view their whole manufacturing section solely as a facilitator to their company roadmap. Manufacturing alone is not a high margin business regardless of the technology. Basically anyone with $200M - $300M can easily copy everything that VTSS has and get it working within 1 year. In fact they will be ahead of VTSS if they invest in the latest steppers.
As for VTSS being a takeover target, I doubt it. However, I would not object because a high flyer like VTSS would get at least a 30% premium over the 52 week high, 30% extra works for me. A 30% premium values VTSS at around $3B. That figure limits the number of takeover candidates. TXN and INTC have that much cash but that's about all. Now TXN just gave away its internal GaAs section in the Raytheon deal, so I don't think that TXN is interested. INTC maybe but why?
Slob |
