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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: SPSEIFERT who wrote (3728)	6/12/1998 10:44:00 AM
From: Brooks Jackson	Read Replies (2) \| Respond to of 6180

Can't resist -- in for more at 48 3/16

To: SPSEIFERT who wrote (3728)	6/12/1998 3:46:00 PM
From: pat mudge	Respond to of 6180

SPSEIFERT -- I just posted all I know on the IBM clone. As for timing, I believe the IBM chip will be out the end of this year or the beginning of next. With DSPs, I'm told it's hard to lose a customer once you have them because of software upgrades. I would imagine IBM will have to device a strategy to get new customers if they're not successful in stealing TI's. Pat

To: SPSEIFERT who wrote (3728)	6/12/1998 4:15:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 6180

SP -- Here's another article that verifies that IBM won't be threatening TI any time soon: >>> IBM to Boost Custom Chips for Phones, Other Markets Armonk, New York, June 10 (Bloomberg) -- International Business Machines Corp. will spend more than $100 million to expand its custom microchip business, including chips for cellular phones, a business dominated by Texas Instruments Inc. The investment includes adding more than two dozen ''chip cores'' -- basic chip components that can be assembled in various combinations to create new chip designs. The cores will allow IBM to build chips for use in a variety of products, from digital cameras and set-top cable-television boxes to computers. One of the chip cores will work with a Texas Instruments Inc. digital-signal processor -- used in cell phones and other communications devices. The core is the first alternative to the Texas Instruments product, IBM said. It's also the latest move by IBM to boost its chip business, adding to commitments to make microprocessors for Advanced Micro Devices Inc. and others. This is another tool for IBM to try and fuel growth,'' said semiconductor analyst Dan Scovel at Fahnestock & Co. While it won't challenge Texas Instruments -- the world's fourth-largest chipmaker -- anytime soon, IBM's move heats up competition for makers of so-called application-specific integrated circuits, or specialized custom chips. LSI Logic Corp., a leading maker of ASICs, fell 1 7/16 to 23 9/16. IBM fell 2 to 117 1/4. IBM is LSI's biggest competitor in the ASIC business. IBM has moved up to be the second-largest ASIC maker from the fifth, said the Armonk, New York-based company. The designs are highly specialized, and once customers start working with a custom chipmaker like LSI, they rarely switch because of the expense involved. With the drive to integrate more components on a single chip, complex designs are becoming the norm,'' said Mike Attardo, general manager of IBM Microelectronics Division. Challenging TI Texas Instruments has been steadily paring back or exiting less-profitable chip businesses such as memory chips to focus on its digital-signal processor business. Those chips carry some of the highest profit margins in the semiconductor industry. IBM's entry into the market could make the chips a commodity sooner than expected, driving prices down. Already, Lucent Technologies Inc. and Motorola Inc. make the chips. Plus, the two companies said last week they'll work together to develop next-generation DSP technology, pitting them more against market leader Texas Instruments. The DSP market is forecast to swell to $14 billion in the next four years from more than $3 billion in 1997, according to market researcher Forward Concepts. 70% Growth IBM's custom-chip business grew by more than 70 percent in 1997, Attardo said. Custom chips are being used in an increasing array of digital equipment, and the custom-chip industry is expected to more than double to $52 billion in sales by 2002 from $21 billion today, IBM said. Other custom-chip investments by IBM include an expansion of its Burlington, Vermont, plant for making masks, the stencils used to transfer circuit designs onto actual chips. IBM also is adding design engineers and expanding support for popular design software to help manufacturers integrate IBM custom-chip technology into a broader variety of electronic products. IBM is really cleaning up in the ASIC market,'' said Nathan Brookwood, a semiconductor analyst at market research firm Dataquest. IBM has been working to distance itself further from memory chips, which have been wracked by plunging prices. Fully 60 percent of its chip business is so-called custom-logic chips, 20 percent is microprocessors and 20 percent is memory. The chip business had $3.3 billion in revenue last year, placing it 13th in worldwide rankings of chip companies. So far this year, IBM has entered into or expanded agreements with microprocessor manufacturers to make the devices for them. Since Apple Computer Inc. scrapped cloning of its Macintosh computers, IBM needed to find ways to take up extra capacity in its chip plants. IBM currently makes microprocessors, the brains of PCs, for Advanced Micro Devices, National Semiconductor Corp.'s Cyrix unit and Integrated Device Technology Inc. >>