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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: wjmx who wrote (3693)	3/29/2000 9:16:00 AM
From: Venkie	Read Replies (1) \| Respond to of 6531

thats why they call it the fool

To: wjmx who wrote (3693)	3/29/2000 9:18:00 AM
From: SJS	Respond to of 6531

From CSFB this morning: __________________________ Broadcom (BRCM-$223?Cap $46B-Buy) BRCM Shares Unfairly Penalized On Competitive Concerns FY 00/01 $0.72/$0.98 no change ú BRCM?s stock has been under selling pressure recently due in part to last week's IBM announcement that it will enter into the set-top box market with its PowerPC processor and related set-top box components. IBM aims to simplify existing set-top box designs by combining components such as an audio/video decoders, memory interface and peripheral interfaces all on one chip. Investors' initially perceived this announcement as a negative for BRCM, as they supply the necessary silicon for these components (tuner, audio/video decoders). ú We believe the recent sell off (BRCM down approx. 10% since announcement) is unwarranted as IBM is a late entrant into this competitive market, its STB PowerPC 405 chipset won't be available until May, and it has yet to announce any customer design wins. BRCM commands a leading market share position for set-top boxes, with a large number of customers including Motorola (recently acquired General Instruments) SFA, Pace, Pioneer, Sony and Phillips. BRCM shipped approx. 1.5 million units during Q4 and we believe it could ship silicon for over 8 mm digital STBs for 2000, conservatively. ú Separately, BRCM continues to perform exceedingly well in it core networking, set-top-box and cable modem businesses. We believe the tone of business is great and that BRCM will surpass our Q1 espectations of $179 mm and $0.16/share on the strength of networking business. Despite the highly competitive environment, we believe BRCM's systems strategy will allow them to garner an increasing proportion of silicon real estate per system continuing the favorable trend of a rising ASP per system. ú Outside its core businesses, we believe BRCM will become more vocal with respect to its wireless capabilities, future high end optical/SONET products and VDSL solutions. These three high growth opportunities should solidify BRCM premium valuation and lead to continued upside EPS surprises in 2001/02. In wireless BRCM will have MMDS solutions available by Q300 and is suspected of having cell phone silicon in H2:00. We are hearing that BRCM will position itself as having SONET (OC-48 and possibly OC-192) capabilities by year end but we are not sure if this from internal sources or via future acquisition. BRCM's recent extended agreement with Next Level, the shipment of the 250,000th VDSL chipset and the 30-40% cost reduciton potential of moving to a single chip VDSL solution bode well for BRCM to continue its highend leadership.