Nyquist Capital » EZCH

The Future of the NPU Market - Part 1

Andrew Schmitt — Fri, 28 Mar 2008 19:40:54 +0000

Tthere are parts of the NPU market that will do well and others that will not. The edge of the network, with its burgeoning application growth, provides a fertile cradle for the NPU model while the core network is so harsh an environment that even the best managed companies face long odds of generating superior investment returns. Let’s examine why that is.

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The Madness of the Carrier Chipset Market

Andrew Schmitt — Mon, 23 Jul 2007 22:00:41 +0000

There is an excellent editorial today by Lee Goldberg that explores the lack of new R&D in SONET/SDH and PDH chip sets. While I don’t agree with the conclusion it is a worthy topic of exploration and he highlights something missed by the mainstream tech media.

The networking industry may be about to hit a hidden speed bump as the number of semiconductor companies actively involved with developing products to support SONET/SDH, PDH, and other TDM-based technologies can now be counted on one hand.

Lee thinks this is a big problem. This is not a problem at all. It is the only logical solution to the madness of the past 6 years.

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EZ-Chip and Raza Micro at Gilder Telecosm 2006

Andrew Schmitt — Tue, 10 Oct 2006 17:33:29 +0000

NPU companies consistently make the case the market is moving into their domain and that technology is their edge, right up to the point they go out of business.

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George Gilder - Telecosmic

Andrew Schmitt — Tue, 09 May 2006 15:14:03 +0000

The Wall Street Journal published a biographical article (free till May 10th) on George Gilder, one of the chief exhalers that inflated the optical bubble of 1999.

I mentioned Gilder last week in my first post on Wintegra (WNTG). He has consistently spoken positively of a network processor company called EZ-Chip and the holding company LanOptics Ltd. (LNOP). His support for the company has been unwavering for years as he continues to predict an NPU revenue ramp for EZ-Chip 6 months into the future. I hope this isn’t because EZ-Chip is a leading sponsor of his annual Telecosm shindig. How about some introspection into why things aren’t working out as he projected?

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Wintegra - Following up on a Comment

Andrew Schmitt — Mon, 08 May 2006 14:43:05 +0000

I received a good question on the Wintegra Inc. (WNTG) post I made last week. I felt the response was worth a post on it’s own. Please remember this is not investment advice, and not a negative outlook on Wintegra as a comapny, just my opinion of something that needs to be considered when attaching a multiple and valuation to the company. References to Teknovus and Passave are in context with the previous post.

From “Watcher” -

I don’t really understand your Cisco example: according to your example Cisco doubled its purchasing from Wintegra in 3 years (2003-2005): 27% of $4.5M in 2003 to 10% of $19.5M in 2005: can you explain this again (why doubling sales to Cisco is a problem)?

You ask a good question. In the interest of brevity I oversimplified my argument. Let me explain in detail.

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Wintegra - Good Company, High Valuation

Andrew Schmitt — Fri, 05 May 2006 12:28:25 +0000

Get ready to party like it’s 1999 - Wintegra, Inc. (WNTG), a network processor company, is going public. Prospectus here. Financial summary here.

Wait - the mob cries “This Time It’s Different” - Wintegra doesn’t make those ridiculously large 10G and 2.5G NPU’s that tech messiah George Gilder preached were the salvation of the coming optical revolution. (He still does, BTW - what is EZ-Chip paying this guy?). No, Wintegra’s NPUs are for the access network, Fiber to the home, DSL, i.e. the current pump-and-dump sector for Telecom.

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