ScoreBig: Re: My opinion is that Embarg chip still excels above the Infineon chip ...
I sincerely hope you are right. What exactly are you basing that on? I am basing my concern on the fact that the Infineon product can meet or exceed the stated future performance capabilities of Embarq. What am I missing?
There are countless companies that dwell in the same market and they all make good money.
True enough. Well, at least it was true a couple of years ago, anyway. None of the semis are making money right now except Intel. The difference is that these companies are established companies. Infineon is a 6 Billion a year company. They have their own state-of-the-art fab facilities. They have mature fab processes and products. A fabless start-up cannot compete unless they have a decided performance advantage. The cost advantage will always go to the industry leaders. Do a search on how many start-ups have successfully made it into this market. Personally, I was banking on NVEI having a decided performance advantage that gave them the ability to break into an extremely competitive market. It would seem that they have lost that advantage.
IFX traded at around 6.75 a share at first of March when this news was out first as reported in an earlier post. It now trades about 50-60% higher. Not a large gain for a revolutionary chip wouldnt you think, but a nice gain.
Infineon, as I said, is a 6 Billion dollar company. Their telecommunications chip manufacturing is only one segment of a very large product lineup that included SDRAM memory, Flash, consumer electronic components, etc. The VDSL5100 chipset was announced a few days before the US went to war with Iraq. The chip did not go into full production until last month, and the stock is still up over 50%. Understand that since the announcement of the VDSL5100 product, Infineon has increased its market cap by about 1.5 Billion. If all of that shareprice appreciation was due to the new chip, that is far better than I would have ever anticipated for NVEI.
One year ago this stock traded at appx $18. That doesnt show me alot of strength from IFX shareholders.
Infineon, like other semis, has suffered in this poor economy. Last year, they lost about 750 million. Of course the stock is down. How is that relevant?
I dont understand the frustration here, shall we call it "the sky is falling" attitude without proper documentation of what the competition has.
So... Now I am chicken little? OK. Let me try to explain *my* frustration one more time. I won't speak for anyone else. This company (NVEI) has not delivered on a single technology-related promise. All the while, they have claimed that their technology is far and away better than anything the competition has to offer. Until December, we had to take their word for it. In December, they announced a prototype that performs at approximately 10% of the Cu@OCX performance claims that first brought me into this stock. The company was intentionally cagy about whether the prototype was actually an FPGA as promised and later admitted that it was not. The announced performance is disappointing when compared to the original Cu@OCX claims (which I based my investment on), but the company still claims that it is the best in the business. Now, there is still no FPGA, and the company no longer can claim a competitive advantage because an industry leader has developed a product that at the very least matched the predicted performance of Embarq. Those are the technical reasons. I can list a whole slew of financial reasons, but let's just suffice to say that the company is broke, yet the principals are paid quite handsomely, and a few Carribbean interests have made a bundle for who-knows-what.
These are all valid, concrete and well-documented reasons for being frustrated. I resent the "sky is falling" statement.
Do you have any similarly valid, concrete, and well-documented reasons for being optimistic?
AI
