By: ohmygosh
Reply To: None
Monday, 20 Sep 1999 at 7:28 PM EDT
Post # of 1130
Internet Stock News Announces Investment Opinion: Broadcom: At the Core of Broadband
SAN DIEGO--(BUSINESS WIRE)--Sept. 20, 1999--
INTERNET STOCK NEWS: Sept. 20, 1999
"Broadcom: At the Core of Broadband" by Marc Szem, ISN Writer
Also available on the Web at
internetstocknews.com
The entire Broadband market has been gaining momentum all year. Broadcom Corp.
(Nasdaq:BRCM) has been benefiting from this movement.
Broadcom is one of the leading providers of high-speed transmission and networking
equipment. They design and manufacture integrated circuits for Broadband communications.
The make key technology that enables high-speed transmission of data, voice, and video.
Broadcom's product lines cover high-speed communications devices for TV set-top boxes,
cable modems, digital satellite receivers, xDSL receivers, Broadband data transmission
devices, Fast Ethernet networking devices, and high-speed home networking devices.
Broadcom products work over existing network infrastructure such as coaxial cable and
twisted-pair copper lines. They have significant market share in all of the markets that they
target.
Competition for Broadcom has been mounting on all fronts. Intel Corp. (Nasdaq:INTC),
National Semiconductor (NYSE:NSM) and Motorola (NYSE:MOT) have entered into the
high-speed transmission and device market. In August, Intel unveiled its new line of high
speed networking chips that are similar to Broadcom's networking chips. Intel has a strong
brand name in the PC sector and could become a major threat to Broadcom. National Semi
offers a set-box processor called Media GX. America Online (NYSE:AOL) selected the
Media GX processor for their new set-top boxes. National Semi recently turned the focus of
its Cyrix division away from PCs, towards telecommunications and high speed networking
products. The shift is not surprising when you consider the recent decline in chip prices and
gross margins inherent of the PC chip sector.
Motorola has taken a giant step into the TV set-top box market. On Wednesday, they
announced that they would merge with leading TV set-top box manufacturer, General
Instruments (NYSE:GIC). Additionally, they recently received certification from Excite@Home
(Nasdaq:ATHM), for Motorola's new cable modem. This means that Motorola's cable modem
is approved for use with the Excite@Home Internet service. Broadcom's stock was hit hard
on the merger announcement because General Instruments is one of Broadcom's top
customers. The reaction seems a little severe since Broadcom sells its products to Motorola
as well. Only a few of Broadcom's products compete directly with Motorola's current line of
high-speed products. Broadcom's stock is up almost 200% since January and trades at a
hefty, 150 times 1999 earning, so the stock was due for some profit-taking, but business for
them is not as bad as the recent stock activity would have you believe.
Broadcom has a wide variety of products for high-speed data transmission. They continue to
grow and innovate their product lines. Their new StrataSwitch chip performs the work
currently required by 10 separate chips, using Broadcom's multi-layer switching technology. It
can receive, prioritize, and forward packets of voice, data, and video, at high speeds, over
existing corporate network infrastructure. Broadcom has been building its brand name in the
Broadband transmission market and is well respected in the industry. This is reflected in their
customer list. Other customers, in addition to General Instruments and Motorola, include
3Com (Nasdaq:COMS), Nortel (NYSE:NT), Cisco (Nasdaq:CSCO), Scientific Atlanta
(NYSE:SFA), and Panasonic. Obviously the industry giants are seeing an excellent
opportunity in the emerging market of Broadband circuits and devices. However, it may take
a while for the competition to close the technology gap separating Broadcom from the rest of
the pack.
Article also available on the Web at
internetstocknews.com
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(Nasdaq:MACR) and Copper Mountain (Nasdaq:CMTN).
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