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

To: SteveG who wrote (4260)	2/3/1999 8:51:00 PM
From: Patriarch	Read Replies (1) \| Respond to of 6180

Intel, Analog form communications chip venture February 3, 1999 07:36 PM SAN FRANCISCO, Feb 3 (Reuters) - Intel Corp., the world's largest computer chip maker, is teaming with Analog Devices Inc. in a joint development venture to design digital signal processors for future communications and computing devices, the companies said on Wednesday. The move, which had been expected, marks Intel's entry into the booming digital signal processor, or DSP, market. One of the fastest-growing areas of the semiconductor industry, DSPs are used in a wide range of products -- from cellular phones, pagers, digital cameras, modems, and video equipment. Intel and Analog Devices, already a leader in the DSP field, will develop the core architecture to be used by both companies to manufacture DSPs, which are specialized chips for processing video, images and other data in handheld computers and other equipment. Analog, based in Norwood, Mass., develops analog chips and digital signal processors. The companies will start development using a core DSP technology from Analog Devices, in what analysts regard as a major endorsement of ADI's technology. Shares of Analog Devices jumped $5.75 to $33.875 in active trading ahead of the announcement, which was confirmed after the market closed Wednesday. Intel shares jumped $4.0625 to $138.6875. The Santa Clara, Calif.-based chip giant on Wednesday also announced its first products from its venture with Mattel Inc., the toymaker. Intel and ADI will immediately form a design engineering group, to be based at a facility in Austin, Texas. The companies will collaborate on the design while separately marketing and selling products based upon it, the companies said. The first design is expected to be completed in the second half of 2000, they said. Scant details were available about future products from the venture and manufacturing plans. "I'm not going to talk about any products. When we talk about core, we talk about architecture. When we are ready to talk about specific products, we will get back to you," Ron Smith, corporate vice president and general manager of Intel's computing enhancement group, said at a press conference. The market for digital signal processors climbed to more than $3 billion in 1998 and is expected to grow 25-30 percent this year. Texas Instruments Inc.TXN , Lucent Technologies Inc.LU and ADI are the three leading makers of DSPs, though TI dominates with about a 50 percent stake of the market. "I think we look at this as a significant endorsement of this market," said Greg Delagi, manager of worldwide catalog DSPs for Texas Instruments. Even so, he cautioned, the lead time in the DSP business is lengthy. "It will take a very long time for them to realize their dream." The venture is similar to a joint venture announced last June by Lucent and Motorola Inc.MOT , which are working together to develop a next-generation core digital signal processor technology. "Intel and ADI do really have complementary skills; we are not really competitors," said Jerald Fishman, president and chief executive of Analog Devices. "Our engineering teams seem to have a common vision," he said, adding that the Lucent-Motorola venture appears to be more a sharing of costs. ((Therese Poletti, SF Bureau, 415/677-2542)) REUTERS