Hi Pat, just this thestreet.com article. See the portion on TXN's presentation at the conference
thestreet.com
Silicon Valley: Robbie Stephens Semi
Conference: Day One's First Read of
Year-End Numbers
By Marcy Burstiner, Jeffrey Hoffman and Cory
Johnson
Staff Reporters
7/29/98 3:51 PM ET
SAN FRANCISCO -- The gathering of some 1,200 mutual
fund managers and 95 companies here at the two-day
Robertson Stephens Semiconductor conference is kind
of like a gathering of the Optimists' Club in part of a
larger doomsday cult -- people are looking for good news
in a world of semiconductor nightmares. The hallways of
the sumptuous Ritz-Carlton Hotel are filled with people
talking about Asia, Asia, Asia, as if she's the oldest girl in
the Brady Bunch.
And, after one morning, it seems that the Asia news isn't
any better (surely pleasing Jan), but, perhaps, just
perhaps, there is good news coming for PC sales.
Laptops on the Rise
NeoMagic (NMGC:Nasdaq) went public in March of 1997
with Dell (DELL:Nasdaq) as its only customer. "Not,"
says Chief Financial Officer Merle McClendon, "a bad
customer to have."
But, since then, NeoMagic -- the Santa Clara, Calif.-based
multimedia laptops chip maker -- has expanded its
customer base to every big maker of PC laptops. Dell now
represents less than 20% of NeoMagic's growing revenue
model (though NeoMagic remains Dell's sole supplier of
laptop multimedia chips).
In a crowded and noisy presentation room, McClendon
explained NeoMagic's raison d'etre: the notion that
multimedia machines are not on the desktop, but in the
briefcase. "Most of us don't do presentations from our
desktop," said McClendon, one of the few women who
present at this type of conference. "So the multimedia tool
of choice is the laptop."
That unassailable logic quieted the chit-chat from the
back of the room, and the 50 or so fund managers in the
room started paying attention. McClendon demonstrated
her company's chip by playing a "Size Matters" video clip
from Godzilla. The 30-second spot, with clear video and
audio, was run on a three-pound Sony Vaio 505.
NeoMagic is on a January 31 fiscal year, so it is one of
the few companies presenting here yet to report
second-quarter earnings. Earnings are due Aug. 12, and
the First Call consensus is 26 cents per share.
After the session, McClendon offered some guidance for
those looking for an end to soft PC sales. And the end,
says McClendon, was here. "I can't tell you about overall
PC sales because we only sell into the mobile space,"
she says. "But I can tell you that the mobile space is
growing very strongly. The first- and second-quarter
demand was weaker, but we see it picking up in the third
and fourth quarters."
You Gotta Get Up Early in the Morning...
Those at the conference who got to Salon 1 early enough
to have to wait for the welcome speech by Robbie Stevens
technology head Brian Bean at 7:45 a.m. had to listen to
Muzak that was a little too loud and way too upbeat for
that hour. And that only to hear Bean inform the sparse
crowd that the semiconductor industry, measured by the
Philadelphia Semiconductor Index (SOX) had dropped
by 18% over the past year while the Dow, S&P 500 and
Nasdaq had surged. Who would have known? What's his
expert opinion on the meaning of this?
He says its time to buy. Back to the Muzak.
A Poor Display for Graphics Chips
If you're looking for a turnaround in a broken chip
company, don't look for it from 3DLabs (TDDDF:Nasdaq).
The stock of the maker of graphics accelerator chips has
been beaten badly in the last two quarters, and President
and CEO Osman Kent says that Asia isn't through putting
the hurt on. "Nineteen ninety-eight," he says, "will not be
good.
"Demand for our Permedia chip dried up early this year,"
says Kent. "There was oversupply of 3-D chips, in Taiwan
there was a certain amount of dumping and, in general,
the situation continues unabated today. We expect these
negative trends to continue until at least the fourth quarter,
and we expect some industry consolidation to continue."
3DLabs is hoping to use this downturn to lock in the
high-end 3-D chip market in both the high-end OEM
market (Windows NT workstation users who do graphics
like those seen in Titanic) and add-on boards used by
"enthusiasts" (i.e., video-game geeks who buy graphic
accelerators from Creative Technologies
(CREAF:Nasdaq)). "3-D graphics chips today are the
most complex in a PC today," says Kent. "The chips we
will soon ship will soon be larger, in terms of number of
transistors, than CPUs themselves."
That said, Kent doesn't expect to be selling too many over
the rest of the year. " The graphics sector is still in
oversupply," Kent told TheStreet.com after the
presentation. "The optimists in the industry look for a
turn-up in the fourth quarter, but I'm on the cautious side."
More, More Moore
Why is our friend Nick Moore, who now manages a $1
billion tech stock portfolio for Oakland-based Jurika &
Voyles, the "oft-quoted Nick Moore?"
'Cause he's a good quote!
Vintage Nick in the hallways this morning: "Beware of
companies that have the target price in the name," he
says. "Because 3DLabs is going to $3. Level One
(LEVL:Nasdaq) is going to $1. 3Dfx (TDFX:Nasdaq) ...
you get the idea."
So stay out of the way if an outfit named ZeroLogic
comes public.
Don't Mess with Texas
Rich Templeton, executive vice president of Dallas-based
Texas Instruments (TXN:NYSE), gave one of the lone
cautionary outlooks in a conference which has been, thus
far, full of rousing enthusiasm for future market growth.
The company will end 1998 down overall, but he remained
positive about the future.
The company is well-positioned in digital-signal
processing, which he considers the single most important
market. TI's market share in DSP is bigger than those of
the next two players combined -- Lucent (LU:NYSE) and
Motorola (MOT:NYSE), Templeton said.
DSP competition doesn't so much worry Templeton as it
amazes him. "The only company that hasn't announced
entry into the market is Anheuser Busch [BUD:NYSE],
and I'm still waiting for that," he said.
So how has the company positioned itself? By making
sure college students are fluent in TI DSP before they
graduate and then grabbing them when they do. And by
linking with every important startup venture in the field.
"It's about having the best design engineers and retaining
them," he said.
TI is tightening its grip on analog technology as well. "We
want maniacal focus," he said. The company has been
and continues to shoot for 20% revenue growth and 20%
operations profits over time.
Message to Shorts: MCHP Dares You
Steve Sanghi, president and chief executive officer of
Microchip Technology (MCHP:Nasdaq) of Chandler,
Ariz., threw down the gauntlet to short-sellers.
"Short-sellers have tried to create fear and uncertainty
about Microchip's future," said the head of the company
that makes microcontrollers -- commonly known as
embedded intelligence.
Sanghi was anything but uncertain. He had slides
comparing the company's niche markets to a tidal wave,
an iceberg and a pyramid. Except for two noticeable
glitches: a downslide in 1996 caused by an inventory glut
and a downslide this year he blamed on Asia -- earnings
per share had risen steadily from 30 cents in fiscal 1993
to $1.21 in fiscal 1998. The company was the
20th-biggest supplier of microcontrollers in 1990; now it is
second to Motorola. And he's convinced Microchip's future
designs will topple Motorola to make the company No. 1.
So, what does he say to the short-sellers? "My message
is 'Go ahead, make my day.'" "Only after that 'Go get a
life.'"
The More, the Better
The locker-room talk at the conference, at least in the
early hours, wasn't about the parties attended the night
before or the amount each fund manager had to drink. It
was how many one-on-ones -- chances to talk to
company reps without the press or competing investment
managers around -- each was able to set up.
See Also
SILICON VALLEY
ARCHIVE
|
