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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: Diana Schilke who wrote (7327)	1/9/2000 3:54:00 AM
From: Scrapps	Respond to of 9236

A couple posts from the ADI thread worth exploring:.......... Message 12512339 Message 12512886

To: Diana Schilke who wrote (7327)	2/1/2000 2:58:00 PM
From: Scrapps	Respond to of 9236

Aware's Perspective on GlobeSpan's Acquisition of PairGain's Microelectronics Group 01/25/00 GlobeSpan announced that it has reached an agreement with PairGain to purchase PairGain's microelectronics group, which includes DSL intellectual property (IP) and 40 engineers. We believe this acquisition is positive for Aware for several reasons: Consolidation of Competitors – Aware's business model is to license its intellectual property and software to semiconductor manufacturers who sell chips incorporating Aware's technology. Our competition usually comes from in-house development teams at prospective semiconductor customers. When PairGain announced its intent to divest its microelectronics group in November 1999, the availability of their DSL IP presented a buy option to semiconductor manufacturers who were seeking to make or buy DSL technology. Inasmuch as GlobeSpan is already a competitor of our customers, the acquisition of PairGain's microelectronics group means that: - Aware has one less in-house development team to compete with, and - Aware's customers have one less chip competitor Benign Home for PairGain's DSL - Of all the possible companies that could have purchased PairGain's microelectronics group, GlobeSpan is one of the more benign buyers. It's not clear to us how this acquisition meaningfully strengthens GlobeSpan vis-à-vis Aware. The engineers and IP acquired by GlobeSpan involve both HDSL and ADSL technology. Since Aware is not involved with HDSL technology, the HDSL portion of the acquisition is largely irrelevant to us. While we can't be sure, it may be the key reason GlobeSpan purchased the business. The DMT-based ADSL technology acquired by GlobeSpan would appear to overlap with GlobeSpan's in-house DMT technology. If Globespan's purchase is intended to fill a DMT weakness, it's not clear how this acquisition does that. PairGain's technology is embodied in an Application Specific Integrated Circuit (ASIC) that they call their Falcon chip. ASIC technology, being fixed function and carved into silicon, will not map easily or quickly into GlobeSpan's Titanium chip, which GlobeSpan advertises as a flexible, software upgradable, multi-mode chip. If GlobeSpan's purchase is intended to expand their DMT product line, the PairGain acquisition brings no equipment level design wins to GlobeSpan other than PairGain's Avidia platform, and Avidia has experienced very limited telephone company sales wins. Potential New Customer for Aware's Licensees – According to PairGain's 11/15/99 press release, their decision to divest the microelectronics group was driven by their plan to focus on system-level multi-service access platforms. PairGain no longer needs to make their own internal chips, because merchant DSL chips are available from a number of sources. While PairGain may buy DSL chips initially from GlobeSpan, we believe it is also likely that over time they will buy DSL chips from other semiconductor companies to enhance and expand the functionality of their DSL equipment. If they make that decision, our customers' chipsets would help them improve their Avidia platform. aware.com