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 : PMC-Sierra (PMCS) -- Ignore unavailable to you. Want to Upgrade?

To: Billy Joe who wrote (2390)	3/5/1999 2:19:00 PM
From: Bulldozer	Read Replies (1) \| Respond to of 3818

Billy Joe - The biggest overlap right now with LEVL is in T1/E1. As you know, this is a smaller segment for PMC and not one of their huge drivers of growth. But it is important and they are continuing to come out with new product - apps include DLC boxes, IADs, wireless base stations - in other words - growth of the net drives this business as well. PMC's new Comet 3.3v framer/transciever is supposedly killing LEVL. PMC is expanding their domain by entering the GE mkt. As data com and telecom merge, PMCs customers are seeking component makers with expertise in both areas. Rest assured PMC has plenty of customer interest in their GE products - in fact, my understanding is Galileo's GalNet is second to PMC in many bids and TI is not even on the map. Although the margins on these chips are lower, the volume can be MUCH MUCH higher - thus more (incremental) revs and more dollars to the bottom line. ATm only accounts for 50% of networking sales at PMC or 40% of total revs. Sonet, T1/E1 and Ethernet sales make up the rest. POS/spectra I believe is especially hot - Packet over Sonet is (especially for data com carriers -ISPs only) the method of choice for carrying IP. As QoS (MPLS/Tag Switching) becomes better, look for this to increase even more. We are NOT talking another modem chip business here! Come on Billy Joe - you know the people at PMC are smarter than that! If you can take the same amount of R&D dollars, and produce a chip that does $3M a qtr with 60% margins ($1.8M) or a chip that does $1M a qtr with 80% margins ($800K) - wouldn't you do it?! PMC will retain their stranglehold on their core ATM, SONET and T1 businesses, while expanding their revenue base and income dramatically with GE. That is damn good business sense. Bulldozer