BIllyG, CUBE is still too strongly linked to the SEMI sector, only moves when SEMI's move. One of the bright spots in CUBE's cc was Tom
Ls, time. Well spoken, articulated DIVI's promise well, had a solid base of news releases to talk about. I hope that DIVI goes to some analyst conferences all by themselves soon.
Phillips says 2000( but that's not so far away now)before the constellations are aligned for them....
Philips spoke with Donaldson Lufkin & Jenrette Wednesday and said
that although its semiconductor business was beginning a turnaround,
its electronics business would not see the same until the year 2000. In
premarket activity Philips was trading down....
The disparity between valuations of semis and network system companies
is a window of opportunity and that is why I buy CUBE shares now. I'm betting that DIVI will ultimatley allow CUBE to be valued at a much higher multiple. The semi biz is far more ruthless than I understood
with steep price erosions, I can't believe that all the intellectual capital it takes to do MPEG decode sells for the price of a large pizza. To those who want CUBE to spin DIVI for immediate $$ I think that DIVI is CUBE's crown jewel but it may take a few more years to
put a value on it. FredE why do you think that CUBE is in a crisis situation and has to spin DIVI in 6 mo? Thanks in advance. Go DIVI, make some designs that showcase CUBE's semi knowhow.
When I think of general purpose DSPs I always think of TXN and ADI and not LU, but thats not right.........
fnews.yahoo.com
ilicon Valley
Oct 23, 1998
Silicon Valley: Lucent's Stealth Chip Business
By Marcy Burstiner
Staff Reporter
SAN FRANCISCO -- In the highly competitive semiconductor
industry, Lucent (NYSE:LU - news) is a stealth player.
Sure, the company's known for its young scientists who "make the
things that make communications work." But the chip industry?
That's a bunch of cranky old men who still yak about their Fairchild days.
But Lucent, known mainly as a maker of telecommunications equipment, has become one of the top
semiconductor manufacturers in the country by focusing a hot sector: communications chips. In the
past fiscal year, the company recorded $3 billion in chip sales, or 10% of $30 billion in total revenue.
That makes the chip-making division, Lucent Microelectronics, about a third of the size of Texas
Instruments (NYSE:TXN - news) and twice the size of communications chip maker Analog
Devices (NYSE:ADI - news) . While the overall semiconductor market was in a slump this year,
Lucent's chip sales grew by 10%.
"When you think of Lucent, you think of the big Lucent. You have to dig deep to find a jewel," said
Sohail Khan, vice president for strategy and business development at Lucent Microelectronics.
Based in Allentown, Pa., Lucent Microelectronics is the No. 2 player, behind Texas Instruments, in
one of the fastest-growing slices of this chip sector: digital signal processors, or DSPs. These chips
enable telecom equipment and electronic devices to process real-world signals such as sound and
video. About $3.3 billion worth of DSPs will be sold globally this year, and that number is growing
at an annual clip of 20% to 30%, according to market research firm Forward Concepts.
Other players could soon enter this field as DSP chips are used in more places -- everything from
automotive suspension to household appliances. Will Strauss, an analyst at Forward Concepts, said
that PC makers like Intel (Nasdaq:INTC - news) , Advanced Micro Devices (NYSE:AMD -
news) and National Semiconductor (NYSE:NSM - news) are all trying to put DSP cores --
sound- and video-processing capabilities -- into PC and server chips. So, in the next few years,
Strauss said, TI, Motorola (NYSE:MOT - news) and ADI -- which are now angling for deals with
companies such as Nokia (NYSE:NOKa - news) ADR) and Ericsson (Nasdaq:ERICY - news)
ADR) -- may show up in sunny California trying to partner with Intel and AMD.
Far away from Silicon Valley, Lucent started out making chips for its own telecom equipment when
it was still part of AT&T (NYSE:T - news) . In 1990, it made a big push to sell chips to other
companies. But Lucent became successful after it narrowed its operations by paring down products
to mainly meet the needs of the communications industry. That strategy helped Lucent leapfrog both
ADI and Motorola to control 28% of the DSP chips market, only behind Texas Instrument's 45%
dominant share.
Texas Instruments seems to have adopted a similar strategy by finally throwing off its sluggish
memory lines. The attention to DSP sales seems to have paid off: Texas Instruments' DSP sales
grew 17% in the third quarter, far outpacing Lucent's 7% rate in the same quarter. On the horizon is
the threat that TI's new high-performance DSP chip, the C6x, could erode Lucent's market share.
Lucent is the leading maker of DSP chips used in wireless base stations, and the C6x will compete
with Lucent's base-station chips.
There are signs that growing competition and slowing growth is causing concern for the Lucent
bosses in Murray Hill, N.J. This summer, Lucent announced a partnership with rival Motorola to
design a new DSP architecture, leading some analysts such as NationsBanc Montgomery
Securities' Jonathan Joseph to suggest that both companies have realized they can't fight Texas
Instruments alone. Then, in September, Lucent restructured its Microelectronics management.
"Lucent has got to be worried," Joseph said. "Otherwise they wouldn't have gone into the joint
venture with Motorola." NationsBanc hasn't handled offerings for Lucent, but it has for Texas
Instruments.
Anyone think that that CUBE will have something special to say at COMDEX?Any guesses? |
