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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: gda who wrote (1304)	3/18/1998 10:56:00 AM
From: slob	Read Replies (2) \| Respond to of 4710

Rex, I agree with gda on most of his technical points. Yield is the big difference between VTSS's GaAs production capability and that of others. From what I have heard VTSS is running yields of around 70 - 80%. This is comparable with CMOS yields (typically 80 - 90% probe yield). Since their metalization process is very similar to standard CMOS processing these costs should be similar. It seems to me that the only major production cost difference is the cost of the starting substrate ( $80 / wafer for Si and around $240 / wafer for GaAs). Typically Revenue / wafer for these products is about $6000 to $8000, so the substrate cost is insignificant. IMHO VTSS will only be at a disadvantage when the revenue per wafer drops to below $2500, at this point processing costs will start to be significant. Ease of designing is the other factor that will play against VTSS. GaAs is difficult to get right first time and is not well supported by any third party design tools, this will limit VTSS's integration roadmap. As for growth rates, that's anyones guess! It really all depends on how quickly gigabit links become overloaded. From what I'm seeing the high tech companies are jumping on this bandwagon and building amazing Intranet capabilities, however, the volume won't kick in until all your office based businesses adopt this new technology. Slob Slob