Comments on: Quake – Another Failed AMCC Acquisition http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/ More Signal. Less Noise. Thu, 02 Apr 2009 12:29:57 -0700 http://wordpress.org/?v=2.9.1 hourly 1 By: 10GbE and SFP+ - This Time It’s Different | Nyquist Capital http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-565 10GbE and SFP+ - This Time It’s Different | Nyquist Capital Sat, 22 Dec 2007 01:10:18 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-565 [...] We expected the Aeluros market share to be undercut by new 10GbE PHY vendors like Cortina, Vitesse (VTSS.pk), and AMCC (AMCC) who offered integrated EDC. It appears this conclusion was wrong, as the [...] [...] We expected the Aeluros market share to be undercut by new 10GbE PHY vendors like Cortina, Vitesse (VTSS.pk), and AMCC (AMCC) who offered integrated EDC. It appears this conclusion was wrong, as the [...]

]]> By: Fred http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-563 Fred Sun, 04 Nov 2007 00:30:49 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-563 Yeah who did win this bet? Stock price is showed strength for a while but is back where it was in Aug 06. Yeah who did win this bet? Stock price is showed strength for a while but is back where it was in Aug 06.

]]> By: alandal http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-564 alandal Thu, 18 Oct 2007 18:41:05 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-564 It has been more than a year now, guys! Face up the fact. It has been more than a year now, guys! Face up the fact.

]]> By: bet http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-562 bet Tue, 21 Aug 2007 01:41:18 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-562 "Talk to me in a year Mitch. And take my $1 bet" who won this bet? “Talk to me in a year Mitch. And take my $1 bet”

who won this bet?

]]> By: Vitesse Q406 Conference Call Notes at Nyquist Capital http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-561 Vitesse Q406 Conference Call Notes at Nyquist Capital Tue, 07 Nov 2006 03:43:38 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-561 [...] Networking - 49% of sales. Down slightly relative to previous quarter. Not expected to be long term trend. 80 new design wins (this is always data that should be ignored). All top 5 module makers using 10GE chip with EDC for LRM (ie f*ck you Quake/AMCC). EOS designed into 8 of 10 Tier 1 vendors. [...] [...] Networking – 49% of sales. Down slightly relative to previous quarter. Not expected to be long term trend. 80 new design wins (this is always data that should be ignored). All top 5 module makers using 10GE chip with EDC for LRM (ie f*ck you Quake/AMCC). EOS designed into 8 of 10 Tier 1 vendors. [...]

]]> By: Vitesse Investment Thesis at Nyquist Capital http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-560 Vitesse Investment Thesis at Nyquist Capital Mon, 16 Oct 2006 18:43:52 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-560 [...] Telecom - The annuity with a growth component. Generates $100M a year with approximately 65% margins. This revenue should be considered an annuity and would generate cash for several years in the absence of any incremental R&D and SG&A expenses. Products include competitive SONET/SDH and electro-optical components and large legacy revenue streams. Yesterday, AMCC acquired Quake for functionally identical technology at a cost of $69M, a 5x premium over annual revenue. Intel is seeking a sale of it’s Telecom unit at prices much greater than 2x revenue and has inferior products and customer penetration when compared to Vitesse. A valuation of 2x revenue for the Vitesse telecom unit is justifiable. Valuation $200M. [...] [...] Telecom – The annuity with a growth component. Generates $100M a year with approximately 65% margins. This revenue should be considered an annuity and would generate cash for several years in the absence of any incremental R&D and SG&A expenses. Products include competitive SONET/SDH and electro-optical components and large legacy revenue streams. Yesterday, AMCC acquired Quake for functionally identical technology at a cost of $69M, a 5x premium over annual revenue. Intel is seeking a sale of it’s Telecom unit at prices much greater than 2x revenue and has inferior products and customer penetration when compared to Vitesse. A valuation of 2x revenue for the Vitesse telecom unit is justifiable. Valuation $200M. [...]

]]> By: Andrew Schmitt http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-559 Andrew Schmitt Sat, 05 Aug 2006 01:57:18 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-559 Pulled the replay. $2M in September, not Sept. quarter. Indicated this should be 40% of quarterly revenue, $2M/.4 = $5M. If you believe the 40% number, you are correct. I've edited my notes above. The quarters are backloaded only because semiconductor companies use the last quarter to shovel product into the distrubution channel in order to meet guidance. I don't know why they didn't just answer the direct question about quarterly revenue. The question I wish I had asked, now that I think of it, is what rate of return AMCC expects on their $69MM investment. Pulled the replay. $2M in September, not Sept. quarter. Indicated this should be 40% of quarterly revenue, $2M/.4 = $5M. If you believe the 40% number, you are correct. I’ve edited my notes above.

The quarters are backloaded only because semiconductor companies use the last quarter to shovel product into the distrubution channel in order to meet guidance.

I don’t know why they didn’t just answer the direct question about quarterly revenue.

The question I wish I had asked, now that I think of it, is what rate of return AMCC expects on their $69MM investment.

]]> By: Jack Horowitz http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-558 Jack Horowitz Fri, 04 Aug 2006 22:26:46 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-558 You sure about the $2M a quarter. I listened to the call (hoping to hear you, frankly) and heard $5M a quarter; more like $2m/month. This number showed up in other analyst reports I saw as well. Big difference, so you might want to check it (lest you get flamed some more.) You sure about the $2M a quarter. I listened to the call (hoping to hear you, frankly) and heard $5M a quarter; more like $2m/month. This number showed up in other analyst reports I saw as well.

Big difference, so you might want to check it (lest you get flamed some more.)

]]> By: Andrew Schmitt http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-557 Andrew Schmitt Thu, 03 Aug 2006 18:33:29 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-557 Mitch: I'll dial into the call tonight. I'll ask questions to clarify market share, revenue, ASPs and margin. I appreciate your feedback on my estimates and look forward to company guidance. Make sure you tell the folks at AMCC to have operator to take my call. I see you are commenting from an AMCC ip address, so either the WAN integration is complete, or you are at an AMCC site. Mitch:

I’ll dial into the call tonight. I’ll ask questions to clarify market share, revenue, ASPs and margin. I appreciate your feedback on my estimates and look forward to company guidance.

Make sure you tell the folks at AMCC to have operator to take my call. I see you are commenting from an AMCC ip address, so either the WAN integration is complete, or you are at an AMCC site.

]]> By: m@ http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-556 m@ Thu, 03 Aug 2006 18:11:36 +0000 http://www.nyquistcapital.com/2006/08/03/quake-another-failed-amcc-acquisition/#comment-556 I think that the value in quake is in their current revenue stream. They did a great job getting a part out winning xenpak biz, but aeluros has been taking some market share for the last couple of years. The was pretty clear at OFC in 2005 when aeluros had a bench setup in in the opnext booth in plain site of the quake booth. ouch! Moving outside the module, it is going to be hard to win share. broadcom and marvell have macs and switches that give them a lot of leverage. vitesse has their 300m (bbn) edc for sfp + and aeluros still has a better solution wrt power. Where is the quake competitive advantage? How will they win new sockets? There would seem to be big problems doing any kind of true merger given differences in technologies (design flows,fabs are different), and markets. I can't believe that amcc went into this thinking that they would maintain a staff of 50. Any thoughts on the future of the 'ottawa design center'? I think that the value in quake is in their current revenue stream. They did a great job getting a part out winning xenpak biz, but aeluros has been taking some market share for the last couple of years. The was pretty clear at OFC in 2005 when aeluros had a bench setup in in the opnext booth in plain site of the quake booth. ouch!

Moving outside the module, it is going to be hard to win share. broadcom and marvell have macs and switches that give them a lot of leverage. vitesse has their 300m (bbn) edc for sfp + and aeluros still has a better solution wrt power.

Where is the quake competitive advantage? How will they win new sockets?

There would seem to be big problems doing any kind of true merger given differences in technologies (design flows,fabs are different), and markets. I can’t believe that amcc went into this thinking that they would maintain a staff of 50.

Any thoughts on the future of the ‘ottawa design center’?

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