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 : Conexant (Rockwell Semi Spin-Off) -- Ignore unavailable to you. Want to Upgrade?

To: Silver Knife who wrote (1)	1/14/1999 3:38:00 PM
From: Rishi Gupta	Read Replies (1) \| Respond to of 40

eetimes.com PC unit will take back seat at Conexant By Loring Wirbel EE Times (01/13/99, 11:51 a.m. EDT) NEWPORT BEACH, Calif. ¡X Conexant Systems Inc., the newest kid on the communications block, is setting off in a radically different direction from that of former parent Rockwell International Corp. Although the personal computing operation still brings in the largest revenue of the company's five divisions, Dwight Decker, chief executive at Conexant, said the shrinking margins in all PC-oriented products means that client-side analog and digital modems will get less investment than was traditional at Rockwell. The two divisions of the $1.2 billion "startup" slated to get the lion's share of investment in 1999 ¡X wireless communications and network access ¡X represent the fields with the largest compound growth rate and the highest margins, respectively. And Conexant's gallium-arsenide fab in Newbury Park, Calif., will play a key role in both groups' fortunes. Decker said that moving the company's full GSM digital cellular chip-set solution into volume production will be Conexant's highest wireless priority. Next on the list is an effort to move CDMA and upbanded GSM products from power amps into full chip sets covering baseband to antenna functions. Conexant will leverage the GaAs RF work done in power amplifiers and low-noise amps to enhance its development work in silicon IF and baseband functions. In the network access division, current T1/T3 and Asynchronous Transfer Mode products are enjoying high margins. But Conexant sees its top development priority as broadening the GaAs work in OC-48 (2.5-Gbit) and OC-192 (10-Gbit) Sonet physical-layer products, including transimpedance amps, clock and data-recovery chips, laser drivers and mux-demux parts. "Newbury Park will generate more than $100 million in revenue in the course of 1999," Decker said. "That makes our GaAs facility bigger than Anadigics', bigger than TriQuint's and about in line with Vitesse." The other goal within the network access division will be enhancing the remote-access concentrator products with voice-over Internet Protocol (VoIP) support, adding voice compression and packetization functions directly into the concentrator chip. VoIP also plays a role in another Conexant division, digital "infotainment." A Docsis-compatible two-way cable-modem chip set will roll out in 1999, and then be enhanced with adjunct products. One device will be a single-chip quadrature-amplitude modulator and media-access controller. Also in the chute are a single-chip RF tuner and a VoIP voice codec, allowing cable-modem manufacturers to quickly support IP telephony over cable networks. Decker also sees important growth in the personal imaging division, where Conexant will offer CMOS imagers and the first dedicated chip set for color ink-jet printers. That leaves the PC operation, a group Conexant can't ignore, but in which margins will likely remain depressed for some time to come. Decker said that Conexant must be involved in markets such as standalone G.lite ADSL modems, combination V.90/G.lite modems and devices that support G.lite, V.90 and the Home Phoneline Networking Alliance controller in a single chip. The company also must continue to drive software-based modem chip sets using host Pentium control, which already amount to 10 percent of analog modem volumes shipped. But the business won't be much fun. "We're telling the institutional investors that G.lite is not going to be a winner from a revenue perspective in the near term," Decker said. "We believe in ADSL, but it's going to take the phone companies a while to deploy it. The same can be said of cable modems, but the important point is that the closer products get to the PC, the worse the margins become." Indeed, said Decker, "We're anticipating poor margins in all PC-related businesses for the foreseeable future."