Valence Gets Sony GPS Design Win; Telenetics Comes Up for Wireless Air
A friend of mine who worked in the research department at Banc of America Securities once told me that writers, not accountants, make the best analysts.
I wasn’t sure what he meant until I saw a comment from Charles Hartley, a principal at San Francisco-based Crystal Asset Management LLC, that took aim at Intersil Corp., Irvine. Think what you will about Hartley’s take on the stock. But his comments make for good reading.
“Intersil sounds like ointment for teenagers,” Hartley wrote. “But the firm actually makes semiconductors and integrated circuits. Its products are sold to a variety of users, including automotive, space and military. Analog ICs account for 60% of sales. Major customers include Compaq, Nokia, Samsung, and Siemens.”
It gets better.
“ISIL has a solid backlog,” Hartley said. “But it trades at 90 times earnings and 6.4 times sales. This is a Buick company at a Ferrari price. Sell Intersil now.”
One thing Hartley didn’t mention: Intersil recently landed a deal with Taiwan-based Gigabyte Titan Technology Co. to make chips for its Pentium 4 and Rambus motherboards, the main boards in personal computers.
The deal comes as Intersil’s business already is strong. After Intersil sold its discrete semiconductor division to Fairchild Semiconductor International Inc. this year for $338 million, the company doubled its cash on hand to $624 million as of Sept. 28. Intersil’s cash is nearly equal to the combined total of Conexant Systems Inc. and Broadcom Corp.,Orange County’s largest and second-largest chipmakers.
Intersil and its executives say they are looking to expand,including through a planned acquisition push.
“We have an attractive market cap. We’re certainly looking to make acquisitions,” Intersil Chief Executive Greg Williams said.
At recent check, Intersil’s market value was nearly $4 billion.
Valence Gets Sony Win
Intersil isn’t the only one getting deals.
With its first product just out of the box, Irvine’s Valence Semiconductor has landed one of tech’s big kahunas. Valence’s global positioning chip received a design win from Sony Corp., which plans to use it in handheld devices.
“This design win with Sony is an important step for Valence as an emerging company because it allows us to work closely with a world leader in home entertainment, consumer electronics and digital media,all markets for which we are currently developing (chips designs),” said Les Barkley, senior vice president of business development for Valence Semiconductor.
“More importantly, Sony is validating our product strategy as we work towards integrating the home, workplace and automobile to provide consumers with anyplace, any time connectivity,” Barkley said.
Valence unveiled the GPS chip in September, along with a marketing campaign to help lure investor interest. After four rounds of funding and $35 million in investments, including cash from Conexant Systems Inc., Western Digital Corp. and others, the chip is Valence’s only released product so far.
Where some startups have customers laid out and designs to be mass-produced shortly after their founding, Valence has taken a more circuitous route. In the past three years, the company has drummed up business by designing specialty chips as a contracted designer, rather than mass producing its own chips.
But the GPS chip seems to be in the right place at the right time, according to Sony executives.
“When we compared Valence’s GPS radio technology and development roadmap to other available solutions in the industry, we felt that their technology would yield the time-to-market and performance objectives that we required,” said Nobuyasu Matsuoka, a marketing manager at Sony Electronics.
Telenetics Plans Wireless Expansion
Don’t let the guys over at Lake Forest’s Telenetics Corp. hear anyone say they’re going to be getting out of the wireless data business.
Despite any notions to the contrary, the company recently said it plans to reinvigorate its wireless business. The company has been working to stabilize production issues in another portion of its networking operation.
“Now that production of the Sunrise series networking products, licensed from Motorola, has stabilized, we are planning to expand our wireless data activities,” said the company’s chief executive, Shala Shashani Lutz. “Despite our emphasis on production of the Sunrise products in the last 10 months, Telenetics has remained committed to wireless data communications as a long-term growth strategy.”
STM in Nepal
It may be home to frozen mountain ranges and neighbor to one of the world’s most bitter political conflicts, but that wasn’t enough to stop Irvine’s STM Wireless Inc. from striking a deal to set up a satellite telephone network in Nepal.
The network is set to be built in two phases starting in 2002. The contract calls for one of the largest rural telephony projects in Asia, according to STM, and is set to offer service in many of the Himalayan country’s remote and inaccessible areas.
“We are very happy with the opportunity to supply the (satellite) network for use in one of the most rugged areas of the world,” STM Chief Executive Emil Youssefzadeh said.
