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 : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (47605)	3/27/1999 7:49:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

By Therese Poletti SAN FRANCISCO, March 25 (Reuters) - The $126 billion semiconductor industry is ripe for a wave of mergers after suffering its longest running slump, with this year's deals likely to set a record, analysts and investment bankers say. Already this year, Intel Corp. <INTC.O> has announced the industry's biggest deal ever, the $2.2 billion acquisition of networking chip maker Level One Communications Inc. <LEVL.O>. "We are in the beginning stages of a consolidation in the semiconductor space," said John Marren, a managing director at Morgan Stanley Dean Witter in Menlo Park, Calif. By itself the Intel deal -- the largest in its 31-year history -- would take the industry more than a third of the way toward last year's record merger total. Last year was a banner year for industry mergers, with 71 deals in 1998 valued at a total of $5.9 billion versus 44 deals in 1997 valued at $3.3 billion, according to figures compiled by Broadview Associates of Fort Lee, N.J. Many semiconductor companies are looking to mergers to compete in high-growth areas such as wireless, communications and networking, or to add manufacturing without plunking down the $1 billion in cash needed to build a new chip factory. "Scale becomes first and foremost, and if you are going to be a manufacturer of chips, you need to have scale or critical mass to compete with the big guys," Marren said. The ever-increasing popularity of wireless phones, personal digital assistants and other gadgets will make the networking and communications industries two of the hottest areas for deals, analysts say. This year, a slew of deals are in the works already, many focusing on these high growth areas. Indeed, VLSI Technology Inc., <VLSI.O> already is the target of a hostile $777 million takeover offer from Dutch electronics giant Philips Electronics <PHG.AS>. San Jose, Calif.-based VLSI, which makes chips for wireless communications and computer networking, is likely to be bought by either Philips or another company looking to enter the fast-growing wireless market. Among other deals, Applied Micro Circuits Corp. <AMCC.O> of San Diego, Calif., moved this month to expand its market for high-speed communications products when it said it would buy Cimaron Communications Corp. for $115 million in stock. Last month LSI Logic Corp. <LSI.N> agreed to buy Fremont, Calif.-based SEEQ Technology <SEEQ.O> in a stock swap valued at $100 million. Milpitas, Calif.-based LSI hopes to add a layer of fast networking technology to its specialty chips. Long-struggling Cypress Semiconductor Corp. <CY.N> of San Jose said in January it would buy IC Works Inc. in a $100 million stock deal to expand into the wireless market and reduce its dependence on the highly cyclical memory business. "There will be more consolidation within the industry," said Charles Glavin, a CS First Boston analyst. He said he was not surprised by the hefty 80 percent premium Intel paid for Level One but was a bit taken aback that such a high premium came so early in the consolidation cycle. "We thought this kind of premium would be paid later in the cycle," Glavin said. Analysts said a few networking and high-speed communications takeover candidates include Galileo Technology Ltd. <GALTF.O> and possibly Irvine, Calif.-based Broadcom Corp. <BRCM.O>, which is making some acquisitions of its own. In January Broadcom, a networking chip maker, announced a deal to buy Maverick Networks, a developer of chips for network switching equipment, in a stock deal worth about $100 million. Mergers also are heating up in the downtrodden $22 billion semiconductor equipment industry, which makes the million dollar equipment used by chip makers around the world. Chip equipment firms are slowly turning around, with forecasts that revenues will be flat this year after dropping last year. The industry sl...

To: GST who wrote (47605)	3/27/1999 8:17:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Hot Internet stocks seen hurting Latin America By Michael Connor BAL HARBOUR, Fla., March 26 (Reuters) - Rocketing U.S. Internet stocks now attract many of the risk-taking global investors normally active in emerging markets and will help make foreign capital scarce in Latin America through at least 1999, the U.S. economist said. Breathtaking returns for online bookseller Amazon.com <AMZN.O> and other Internet companies were proving stiff competitors to emerging markets for private-sector investment dollars, economist Moises Naim said. "Which would you rather have: Bulgarian bonds or Amazon.com shares?," Naim said at a Latin American business executives conference in Bal Harbour, Fla. Returns on stocks in the Standard & Poor 500 index of top U.S. companies have outpaced emerging market investments every year since 1994, Naim said in a written report. "The fact that an Internet-based company like Amazon.com ... has twice the stock market value as the entire Venezuelan stock market or half that of Argentina illustrates the point," wrote Naim, also editor of Foreign Policy magazine. But Latin America, still needing great sums to build manufacturing plants and other infrastructure, was not just being hurt by cyber stocks, economists said. Low prices for oil, copper and other commodities and investor fears of emerging markets caused by the Asian and Russian financial crises of 1997 and 1998 ended Latin America's long expansion for at least a year or two, economists said. "The name of the game in Latin America in 1999 and 2000 will be illiquidity," said Naim, adding he expects regional investment inflows this year of $50 billion to $54 billion. "This is half of what it was in 1997." Net private-sector investment inflows to Latin America shot from $10 billion in 1990 to a peak of $106 billion in 1997 before dropping back sharply last year, Naim said. David Hale, chief economist for the Zurich Group, told the executives at the conference that 1999 will prove difficult for Latin American firms and governments seeking outside investment monies. "This year will be a correction, perhaps down to $40 billion," Hale said. "But this is very impressive indeed, considering where we were just a few years ago." The economists, as well as bankers, trade officials and industry executives at the conference sponsored by Business Week magazine, said Latin America, including troubled Brazil, was showing pleasing economic stability through the slowdown. Banks were better capitalized and government policy-makers were largely keeping to pro-market reforms favored by global investors, they said. Domestic pension funds with substantial equity holdings were a favorable element that did not exist in previous regional economic crises. Naim predicted waves of mergers led by bargain-seeking investors from outside Latin America, a wave that will transform the region's family-based company-boardroom culture. "If we take a two or three-year view, Latin America will come out of this quite well," Hale said.