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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: AJBurl who wrote (6973)	2/23/1998 11:43:00 PM
From: Rob S.	Respond to of 11555

Very interesting. Now that Cyrix is owned by NSM, which has a full Intel patent cross-license, they are fabing their parts at TSMC. That brings low cost, high capacity manufacturing to Cyrix and allows them to take advantage of the of the Asian devaluation and close ties TSMC has to Asian markets. Good strategic thinking and something like what I hope to see soon at IDTI.

To: AJBurl who wrote (6973)	2/24/1998 8:35:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 11555

Here's another mention of the Cyrix/NSM and TSMC deal: "National Semiconductor Corp (NSM) NATIONAL SEMICONDUCTOR CORP will give big central processing unit orders to Taiwan's microchip giant TAIWAN SEMICONDUCTOR MFG CO LTD, the local Economic Daily News reported. National Semicon will commission Taiwan Semicon to produce 10 million CPUs a year, or roughly one-tenth of the global CPU output, the paper said. A Taiwan Semicon executive, who declined to be named, said he could not confirm the report, but said Taiwan Semicon had made prototypes for National Semicon. "Without authorisation from our client, we cannot confirm any reports about receiving orders," the executive said. "But we have conducted prototyping for National Semicon'c CPUs." (Reuters 07:44 PM ET 02/23/98)" As I've been pointing out on this thread and to Brian B. at IDTI, the Asian situation is ripe for IDTI to work a deal to fab parts. The only caveat is that IDTI does not have the pretection of an Intel patent cross-license. NSM has the license and is extending it to production at TSMC. TSMC does not, to my knowledge, have a license themselves, and therefore, would face an Intel lawsuit if they tried to design and manufacture parts for their own use. Intel could try to raise issue with NSM's off-loading of production under the cross-license, but since off-loading of IP production is a very common industry practice, Intel could not win in court, IMO. IDTI could benefit from entering a fab agreement with one of the Intel licensed companies. It would be a further stretch of the legal franchise for that company to then go to an Asian mega fab to have parts built, but the principle seems to be the same - once you own a cross-license, you can manufacture parts using with potentially disputed licensed technology. The armies of lawyers might build a few new island retreats on the money they will make if Intel tries to retest the precedent or contest new twists to the corporate relationships of the licensed parties. My thinkng is increasingly that there will be a price war that will develop as 0.25 um production ramps into '99. I think by that time 233 Mhz Pentium MMX class product will sell for under $75 and maybe down to $50. MediaGX type "systems-on-a-chip" that reduce overal PC system complexity and cost are also likely to become more prevalent. A few months ago, Intel ignorantly said that they had "been there done that" as far as pursuing an integrated chip solution and had determined that Intel would not pursue it anytime soon. That thinking among Intel managers may go down as a blatant case of seeing things for the way you want them to be rather than the way they realy are (and your getting paid the "big bucks" for). Intel is now very late to the game to try to come out with stop-gap measure crippled PII parts and then more optimized parts and architectures to address the worldwide market expansion on the back of the sub $1000 and sub $500 PC and Internet appliance markets. IDTI has the right product orientation and the most efficient and brilliant design team on the planet, IMO. They also have very efficient and proven fab capability and experience. But IDTI is still a babe in the woods. I hope the tiny bade doesn't get swallowed by hungry wolves.