Good Opportunity for Growth in Storage and Broadband Communication due to the big move to video . The old “broadband” was made for text not video. We are in the inning 2 of a 9 inning game .

This is a very good company to be in going forward .

What is the volume of the total ONU contract? As in 2005, China Netcom deployed only 20 FlexLight ONU for business users in each cities. Would you consider this volume as mass deployment.

FiberHome have shipped 10,000 GE-PON ONU to China Telecom and China Netcom.

I don’t think China Telecom and China Netcom have made decision on xPON yet. They probably won’t make decision until 2008.

This is the same info trotted out many times before. I am an independent party and it is pretty clear that regardless of how many press releases Flexlight makes, China is going GE-PON for the majority of installs.

I am starting to think that GPON won’t get deployed much at all even inside NA for the next 3 years.

Technical speaking GPON is superior than EPON and meet telecom service provider’s requirement much better.

RHK and iData reported that NTT has announced that it will move to BPON, GPON. China Telecom and China Netcom have made decision to adopt GPON as their technology of choice. China Netcom has signed contrct with FlexLight to purchase GPON equipment from FlexLight and already started deployment in 15 cities. Huawei also announced to choose BroadLight as its chip supplier to develop GPON equipment. I believe Bell companies decision to adopt GPON technology will have profound influence on the decision making process on other parts of the world.

EPON market may shrink quickly and PMC will have to fight for GPON market share from the very beginning

Any of the ONU vendors selling to the large carriers are making little to no money on the ONU. There is a huge amount of pressure to reduce costs. I hear about it constantly. This is driving the MAC vendors to get to an “ONU on a chip” solution. Where I see the benefit of this acquisition is that PMCS will help to Passave get to an ONU SoC in a shorter amount of time without having to license a bunch of IP and develop a new software development kit. This will be a big advantage over Teknovus in the GE-PON space. In the G-PON market, most everyone is already integrating the VoIP functions. No big advantage for Passave, there.

I think prices for a SoC will be priced comparably to today’s prices for a plain MAC. Again, I don’t PMCS would realize $40 of revenue for this solution.

From the con call:

Topic four, I will provide a brief overview of the terms of the transaction. One, structure. PMC-Sierra shall deliver shares of its common stock in exchange for all the outstanding equities, shares, warrants and options of Passave. Two, aggregate consideration. Within a range of stock prices, the consideration to be delivered by PMC-Sierra shall be $300 million. If the stock price of our stock differs from an average signing price by more than 16.7%, something referred to as a collar, the number of shares will be increased or decreased to keep the total value of the consideration constant, or $300 million.

With respect to valuation, it’s worth noting that the October 21 IPO filing indicated a going public enterprise value of about $125mm. This IPO was halted because of the UTStarcom issue, and then along comes PMC to pay $300mm for the company. It sort of puzzles me what happened in the intervening five months to cause this sort of increase in value, but perhaps they all know something we don’t.

The comparison to PMC’s sales multiple is a little bit misleading because PMC is paying with cash raised by a convertible issued when the stock was much lower. I am not sure where the convertible strikes but it isprobably around $8 or less.

Finally, one thing nobody really seems to talk about is PMC’s overwhelming market share in ATM. I have read analyst reports where the analyst “conservatively” assumes that this is a low growth business. My personal thought is that this business could fall off a cliff. Any thoughts out there?