Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (126274)	6/10/2001 11:19:13 AM
From: H James Morris	Respond to of 164684

>I should ditch these and go into amcc I'd wait to see if AMCC tests its 52 week low first. I'm back in AMCC at 28 I wished I'd waited too. >June 6, 2001 An Ottawa startup company called Quake Technologies is emerging as a new rival to San Diego-based Applied Micro Circuits Corp. -- with backing from AMCC's second-biggest customer. Quake, which announced last week that it received $30 million in venture funding, has been developing "mixed signal, physical layer integrated circuits" for optical data networks. The company was founded in April 2000. "They are -- or will be -- a competitor of ours," said Brent Little, AMCC's vice president for strategic marketing. "We have yet to really see them out in the marketplace, but we've heard of them. Quake's communications chips, which process data at 10-and 40-gigabits per second, will likely compete directly with chips that rank as AMCC's bread-and-butter products. Little said the San Diego chip maker derives more than half its revenue from sales of such chips to networking companies such as Cisco Systems, which ranks as AMCC's second-biggest customer. So some would expect AMCC executives to voice consternation, to say the least, over the fact that Cisco was part of the $30 million in second-round financing that Quake announced May 30. But Quake is not sending any shudders through AMCC's executive offices -- at least not yet. "It doesn't really cause us consternation because that's just the way Cisco is," Little said. Unlike AMCC's other major customers, Cisco appears to have a corporate strategy designed to foment competition among its suppliers. "I don't think it's that typical for our industry, except for Cisco," Little said. "Cisco is kind of a rogue." Other big network customers, such as Nortel Networks or Alcatel, typically make venture investments in related industries. But Cisco often funds startups that operate squarely within Cisco's own base of suppliers. Or as Little put it: "The fundamental strategy is, 'Let's keep the suppliers down and don't let any one of them get too strong.' " A Cisco spokeswoman, Melanie Bragg, would not disclose exactly how much Cisco has sunk into Quake Technologies -- and she declined to discuss specifics concerning the company's investment strategy. "Our investment strategy is to focus on key technologies and key technology markets, such as wireless and optical components," Bragg said. Quake's latest round of financing was led by Bowman Capital, and included Mohr, Davidow Ventures, Emerging Alliance Fund and Japan's Mitsubishi, which also dabbles in networking equipment. Quake's chief executive, Dan Trepanier, could not be reached for comment. AMCC spokesman Bill Berridge noted that high-speed, mixed-signal chips represent only one segment of at least five distinct elements, or layers, that make up what he called the communications IC value chain. While Quake's products are focused in only one layer, Berridge said AMCC's products span the entire chain. AMCC already competes against other communications chip makers, such as PMC-Sierra and Vitesse Semiconductor. In the end, Quake's sudden arrival may only heighten the feeling that AMCC -- like other chip makers -- is living on a fault line.