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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (974)	3/16/2000 2:48:00 AM
From: pat mudge	Respond to of 3951

Intel's GIGA acquisition from EETimes: Giga purchase puts Intel inside OC-192 By Craig Matsumoto EE Times (03/15/00, 5:22 p.m. EST) SAN MATEO, Calif. ? Hungering for an immediate presence in the hot OC-192 market, Intel Corp. has announced plans to acquire Giga A/S, a Danish chip maker, for $1.25 billion in cash. Intel picked up OC-3 and OC-12 products, as well as OC-48 work in development, from its acquisition last year of Level One Communications Inc. But with the sudden crush by carriers to install OC-192 (10 Gbit/second) Sonet systems, Intel couldn't afford to wait for its own R&D to reach the OC-192 level. "Everybody knew we had to get into OC-192," an Intel spokesman said. Giga (Copenhagen), a subsidiary of Danish conglomerate NKT, made its name as a top supplier of OC-48 (2.5-Gbit/s) components to OEMs in Europe. Giga also claims to be the only chip maker supplying OC-192 parts in volume. Officials on both sides stressed that Giga and Level One have very little overlap in product lines. "Giga's product line and strategy are complementary to our 1999 acquisition of Level One Communications, and will accelerate our time-to-market and our ability to deliver an integrated high-speed solution," said Mark Christensen, vice president of vice president and general manager of the Network Communications Group at Intel (Santa Clara, Calif.). Manufacturing is one of the looming questions of the merger. Sonet components can be manufactured in CMOS, but the earliest generations for each speed grade usually have to be built on more exotic processes such as gallium arsenide or silicon germanium. Intel lacks such exotic processes. So while Giga recently announced a move to CMOS for its OC-192 components for forward error correction and termination devices, Intel may have to rely on Giga's foundry partners to produce OC-768 (40-Gbit/s) devices. Intel will keep Giga's foundry relationships in place for now, but officials are debating whether to create in-house manufacturing processes for the OC-768 parts, Christensen said. Giga only last month announced plans to move its OC-192 termination devices to CMOS processes. Giga and Intel officials declined to comment on which processes were being considered for OC-768 parts, but competing suppliers have been less coy: Vitesse Semiconductor Corp. (Camarillo, Calif.) already has selected indium phosphide as the basis for its OC-768 product family, which the company expects to begin sampling this year. <<< Now, from Jeff Hecht's Understanding Fiber Optics: "The most important compound for high performance fiber optics is InGaAsP, made of indium, gallium, arsenic, and phosphorus mixed so the number of indium plus gallium atoms equals the number of arsenic plus phosphorous atoms. . . These so-called quaternary (four-element) compounds are more complex than ternary (three-element) compounds such as GaAlAs but are needed to produce output at 1300 and 1550 nm.. . . " Had the Nasdaq not been in a downward spiral, this announcement might have had a positive impact on fiber optics players like SDLI and JDSU. Maybe tomorrow. . . Pat

To: SJS who wrote (974)	3/16/2000 3:15:00 AM
From: pat mudge	Respond to of 3951

Another rendering of the same story, this with more explicit comments regarding the size of the market: >>> mercurycenter.com Intel to spend $1.25 billion for optical chip company Giga BY TOM QUINLAN Mercury News Staff Writer Intel Corp. has agreed to pay $1.25 billion for Danish optical chip company Giga A/V, the latest in a series of acquisitions in the networking chip arena. Giga A/V, a unit of Copenhagen-based NKT, develops high-speed communications chips that act as the bridge between traditional voice and data communications products and the fiber-optic cables that move information as pulses of light. The acquisition of the optical network semiconductor company fills in a crucial piece of Santa Clara-based Intel's efforts to become a broad-based supplier of networking technology. As the amount of voice and data traffic that crisscrosses the globe increases, so will demand for high-speed methods of moving that traffic. As a result, industry observers are predicting that optical networks, which can move information far faster than traditional wire connections such as telephone lines or coaxial cables, will be one of the fastest-growing markets in the communications arena. ``Optical networks represent a very high growth market as more and more people are demanding high-speed access to the Internet,' said Stan Bruederle, a networking industry analyst at Dataquest. ``This is a critical part of the technology needed to make that a reality.' That demand is causing traditional voice-oriented telecommunications network and the data-oriented computer networks to use optical connections to increase their ability to handle information. And in Giga, Intel has picked up an industry leader. Giga executives say 25 unnamed companies have agreed to use their newest product -- a set of chips that can handle optical information at speeds of 10 gigabits per second. That was one of the primary reasons Intel was willing to pay so much for Giga, which had about $25 million in revenues last year, said Mark Christensen, vice president and general manager of Intel's Network Communications Group. ``This market is just exploding,' Christensen said in a conference call announcing the acquisition. ``This market is going to be huge, and I don't think you can judge the value of this particular acquisition based on any sort of trailing indicators. It's just not possible.' Giga will operate as part of Intel's Level One subsidiary, which also makes chips designed for the optical carrier market. Because the acquisition will not require prior approval from either U.S. or European regulatory agencies, Intel expects to complete the acquisition before the end of this month or shortly after.