Chi,
I think I see things differently -
1) According to the company profile, the combined company of Symbios
and Adaptec will have around 6,000 people. Because both are heavily in
SCSI. I suspect a big layoff is unavoidable. Probably 500-1,000. This
could incur a huge charge in June quarter.
Whilst I agree there will inevitably be some scope for rationalisation
in overlapping areas, I think that it is unlikely to be on this scale.
A company that is growing as aggressively as ADPT must have difficulty
finding people (especially technical people). I would think that there
would be considerable scope to "free-up" resources from areas of overlap,
and reassign them to new activities which may presently be under-resourced.
In this context, the acquisition may go a long way to resolving some
of their staffing problems.
2. SCSI is losing ground to Ultra DMA EIDE in desktop market. Look
at the big picture, the pie is not growing. unfortunately, SCSI seems
to be the only sizable biz for ADPT.
Are you sure that SCSI is losing ground to Ultra-IDE ? IDE is certainly
losing ground to Ultra-IDE. Surely SCSI is still the only viable
disk interface standard for -
1) expansion outside of the box, (U-IDE doesn't support large number
of devices or long cable runs),
2) improving performance further inside the box, (U-IDE still only
supports single transactions on the interface at one time),
The very high end of the HDD market will be Fibre Channel. The high/middle
ground will be SCSI, and the "low" end will be IDE/U-IDE.
Isn't the question rather whether SCSI can capture market share in the
"low" end at the expense of U-IDE ? i.e. provided it can become price
competitive, it should become more attractive as it offers tangible
advantages over U-IDE ?
3. Don't understand why Adpt bought Read Channel from ADI. Don't
they have enough of fire to fight after Symbios? Seems like ADPT want
to refocus on disk drive ASIC biz which, again, is not a very profitable
area.
Have you seen how many VLSI devices are on a high-ish performance SCSI
HDD ? It can be 10 or more. ADPT may supply 1 or 2 (?) of these. If ADPT can
sell devices which cut this down by 2-3 parts, they can sell a single
high-price chip, make more margin, reduce their customer costs, reduce
end product costs and help the SCSI market to grow. All of this would
be beneficial to ADPT's Revenues and Earnings.
As I understand it, the ADI acquisition is technology - not people or
facilities. Since ADPT is unlikely to just "rush out" and make this
sort of commitment "on a whim", I think we might assume that they have
already proven the process/technology, and have now acquired it to
guarantee their exclusive use of it ?
The Symbios acquisition apparently brings some state of the art mixed-signal
fab. It might even be the perfect companion for the ADI technology ?
Mark |
