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 : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Thai Chung who wrote (1019)	3/5/1999 6:20:00 AM
From: Thai Chung	Respond to of 6531

ZDII on Level One/INTC 03/05/99 zdii.com

To: Thai Chung who wrote (1019)	3/5/1999 6:30:00 AM
From: Thai Chung	Respond to of 6531

Intel looks beyond PC with Level One deal By Loring Wirbel EE Times (03/04/99, 11:42 p.m. EDT) SANTA CLARA, Calif. — With Intel Corp.'s offer Thursday to acquire Level One Communications Inc. (Sacramento, Calif.) for a $2.2 billion stock swap, the world's largest semiconductor maker took another leap in transforming itself from a desktop monolith to a chip maker poised for a networked, post-PC era. Following just weeks on the heels of an agreement to co-develop a family of digital signal processors with Analog Devices Inc., the Level One acquisition nets Intel not only a $350 million-plus business in LAN and WAN silicon but a cache of analog and mixed-signal design expertise to add to Intel's digital-design prowess. The acquisition would be not only the largest in Intel history, but the largest in a recent spate of acquisition offers to hit the communications semiconductor industry. The deal will give Intel instant credibility in the mixed-signal and DSP-oriented segments of LAN and WAN semiconductor markets, augmenting an existing expertise in digital LAN semiconductors and route-switch hardware within Intel's Hillsboro, Ore. networking business. Mark Christensen, vice president and general manager of the Intel network communications group, said that Intel will look at acquiring or licensing any other technology that is necessary for the company to become a leader in all aspects of communications silicon. Christensen said that when Craig Barrett became chief executive of Intel, he gave the networks group four missions — ramp up client connectivity, home connectivity, small-business connectivity and merchant semiconductor presence. "Although I'd been working on all four fronts, we had not executed enough in the area of building a merchant communications semiconductor business," Christensen said. Intel paid roughly $47 per share for Level One which had been trading at $26 just a day earlier. "You can tell what skill sets are commanding a premium," said Joseph Osha, vice president for global securities research and economics at Merrill Lynch (New York). "These days you don't want to find everyone established at the edge of the network and you lack experience in DSPs or making transceivers. And you can't just waive a wand and get analog designers these days." Ethernet transceivers and repeaters make up more than 60 percent of Level One's business, according to Osha, with T1/E1 line interface components and symmetric Digital Subscriber Line parts making up most of the rest. Intel and Level One had been co-developing Gigabit Ethernet transceivers for copper media. "This was based on the same set of logic that drove Intel to make an alliance with ADI," said Vadim Zlotnikov, senior technology analyst at Stanford C. Bernstein & Co. Inc. (New York). While the deal is unlikely to raise serious antitrust issues as a forerunner to the trial opening up next week, Intel could run into sales channel clash. Intel has defined its LAN and WAN interests primarily from a systems and board-level perspective. Gaining control of everything from Level One's homegrown physical interface chips, to the Gigabit Ethernet MAC chips Level One recently acquired from Jato Technology Inc. (Austin, Texas), could lead to many instances of Intel competing with its customers. The offer also indicates Intel's revitalized interest in DSP. While the company tried to pretend two years ago that most DSP-intensive duties could be handled by faster integer processors, Intel's February joint-development pact with Analog Devices Inc. for a fixed-point DSP, is indicative of a new recognition of the need for DSP building blocks in the Intel design suite. Level One, an expert in DSP modulation for Digital Subscriber Line applications, brings Intel a rich knowledge base in line codes that will be useful in a variety of broadband access markets. The Thursday offer capped off a manic financial week at both semiconductor and system levels. On the communication chip front, LSI Logic Corp. acquired Seeq Technology Inc., Lucent Technologies Inc. bought the Ethernet LAN business of Enable Semiconductor Inc., and Applied Microcircuits Corp. picked up Sonet specialist Cimarron Communications Corp. Systems fronts were equally active, with a heavy European angle — Alcatel SA bought Xylan Corp., General Electric Co. of the UK made an offer for Reltec Corp., and Siemens was prepared to announce multiple acquisitions March 8, perhaps including super-router vendor Argon Networks Inc.