The Japanese Ministry of Internal Affairs and Communications is a great source for data on Japanese communication infrastructure and usage. A recent document provides a state-of-the-network update and lays out the goals for the next 3 years.
Archive for August, 2007
After dropping hints in an earlier conference call (see Vitesse Q207 Conference Call Notes) Vitesse announced the sale of a portion of their storage products to Maxim (MXIM). The $63M transaction has a provision for an additional $12M if certain milestones are hit. The company will use the proceeds from Maxim and $30M in new convertible debt to repay the junk debt to Tennenbaum Capital. (see Tennenbaum and Vitesse).
Three months ago I expected the sale of the entire storage unit to fetch 3.5x revenue. Subsequent research and discussions led me to believe this estimate was inaccurate, something reflected in comments I made (see here).
There are few franchises in the silicon business where one vendor so completely dominates the market. Everyone can name Intel’s CPU business as one. But can you name another?
Infineon/TI (IFX) in DSL is a contender. Conexant (CNXT) in PC modems (but little profit to show for it). Netlogic (NETL) in exotic CAM’s (but beholden to one sugar daddy customer - Cisco).
But nothing approaches the complete and total dominance of Broadcom’s (BRCM) grip on Ethernet switching silicon.
I came away from my visit to last years Telecosm (see articles here) pleasantly surprised by the quality of the debate. I had a chance to share a few beers with George Gilder and talk about the future of NPU’s and of the industry in general. I found the conference superior to standard investment conferences as it has real debate and hard audience questions.
You can imagine my pleasant surprise when I was invited back this year as a panelist. I’ll be participating in a panel debating flexible vs. fixed silicon solutions in the network (agenda here).
Presenting companies that fall under the Nyquist market model: LNOP, ANAD, QCOM, Luxtera, INFN, EQNX, and several more TBD. More information including registration can be found here.
The conference is being held in upstate New York this fall and always draws a very interesting speaker list - last year Steve Forbes, Michael Milken, Carver Mead and John Rutledge all delivered stellar presentations. I went in last year with a slightly negative bias of Gilder and the ‘Gilder Priesthood’ and came away with a positive impression. You might change your mind too. Hope to see you there.
The consolidation of MRV (MRVC) & Fiberxon is a healthy force for the industry but one made at the near term expense of shareholders (see MRV, Luminent, and Fiberxon). The rest of the optical component industry will see the benefits of consolidation, but MRV shareholders have lost nearly 30% of their investment since the merger was approved.
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