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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (43839)	8/15/1999 1:34:00 PM
From: JEFF K	Read Replies (1) \| Respond to of 50808

Anotherone bites the dust (STB's)........ It would be nice to see Cube as # 1 though, but # 2 and trying harder can work too. Oak's set-top-box biz shaky; moves imaging ICs to the fore Mark Hachman Silicon Valley- Like its namesake, Oak Technology Inc. is branching out in a number of different directions. But under new leadership, a bit of pruning might be needed to restore the company's growth, its new chief said. As part of his new position as president and chief executive of Sunnyvale, Calif.-based Oak, Young Sohn is pondering the potential of each of the company's businesses. While the absence of its consumer electronics business from its quarterly earnings report prompted talk of the group's sale, Oak will stride forward in other segments by announcing its second rewritable CD controller chip this week. Although it's a 10-year-old company, Sohn said Oak has traditionally behaved more like an R&D-based start-up, which caused one venture capitalist to dub Oak "HP Labs" for its research-driven mentality and close ties to Hewlett-Packard Co., Sohn said. "We would dive in with a lot of cash in a lot of different product areas, even if there weren't synergies between them." Once a supplier of PC graphics and audio chips, Oak's product lines now consist only of imaging chips for printers, controllers for optical storage products, and multimedia decoders for consumer set-top boxes. In May, under previous chairman and chief executive David Tsang, Oak promoted its set-top-box business, launching a family of terrestrial MPEG receiver chips. Today, Sohn said the fate of the consumer group is less certain. "My job as CEO is to look at all businesses," Sohn said when asked about the future of Oak's set-top business. "Going forward, I think we have to be either number 1 or number 2 [in each segment], or we'll look at other options." According to analyst Michelle Abraham of In-Stat Inc., Scottsdale, Ariz., Oak failed to report MPEG-decoder unit shipments for 1998. STMicroelectronics Inc. held 60% of the unit market, followed by C-Cube Microsystems Inc. and Philips Semiconductors. Right now, however, the business most likely to represent the bulk of the company's revenue is Oak's Pixel Magic imaging subsidiary-a market Sohn estimates at more than $5 billion, and one shared by merchant-chip rival Peerless Systems Corp. and by OEM Electronics for Imaging Inc. Pixel Magic accounts for less than 50% of Oak's sales, which totaled $13.3 million during its fourth fiscal 1999 quarter. However, Oak's acquisition of Xionics Document Technologies Inc. in July for nearly $70 million in cash and stock should bolster the company's systems business. "We don't just need silicon capability," Sohn said. "That was the bias of the former management. We need to build software, we need to build platforms, we need to build connectivity." Meanwhile, Oak this week will announce a belated entry in the CD-R/CD-RW controller market, leveraging its leading role as a supplier of two CD-ROM controllers. The OTI-9790 writes at 8X speeds, but reads at 32X speeds, the generation beyond the 4X write/24X read drives available today. The chip is sampling in a 208-pin package, and is priced at $14.50 in quantities of 10,000. Copyright © 1999 CMP Media Inc.