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Technology Stocks : Broadcom (BRCM)

BRCM 54.67

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Feb 9 4:00 PM EST

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To: Wizard who wrote (241)	5/1/1998 4:25:00 PM
From: Tim Michaels	Read Replies (4) of 6531

I found out some interesting news today that I think poses some problems for the Broadcom story. They went public saying they were first to market with their quad PHY device. The only current viable competitor to Broadcom today is Level One. Broadcom did a pretty good job Level One bashing on their roadshow. The problem now is that Level One has caught up with Broadcom. Not only has Level One caught up with Broadcom, but Level One is already offering devices for less than Broadcom is trying to charge. To make matters worse for Broadcom, Level One's die is smaller (at 0.6 micron, total 83K square mm) than Broadcom's die (at 0.5 micron, total 92K square mm). Also, even though Broadcom has said that they use all digital technology, a friend of mine told me that they actually have analog functionality on 30% of their die. To compound matters worse, of the total $150 million in expected 1998 revenues, $80 million of that is supposed to come from the fast ethernet business. If they stumble at all, they will miss revenue expectations. I was long on this stock, but sold today at the end of the day after the $5 runup in the stock price. Tim

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