InterDigital Inc (IDCC)

[quartzman0]

Buying a chip foundry would be the fastest way to drive this investor to the exits. What a horrible idea.

Look, toll collectors are hated by the manufacturers because they obviously don't want to pay the tax. As any new technology matures, the big manufacturers find a way to eat the toll collectors or use differing technology (as may be the case with Qualcom) or get their governments to resist payments, or any other ruse to avoid the tax. I cannot think of any company in any industry that has remained a tax collector as a successful business model over the long term. IDCC's management knows this and will eventually sell out. To whom and when and for how much are the questions to be answered.

Now, having said that, getting into the extremely high capital investment, highly cyclical, and low-cost producer dominated foundry business is not a better business model. Why do you think that Motorola, Philips, and many other semi producers have sold, spun-off (because they couldn't sell them, so they gave them to their shareholders - neat trick, huh), or otherwise disposed of their foundries?

Q