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I have been trying to figure out what to do with my cash position I've had for a while, and selling stocks I am no longer interested in. I have been trying to find a semiconductor company. I have looked at ATHR, SMDI, and SIGM. ATHR flat out says they "want to be like Broadcom" but do not have the critical mass and infrastructure to compete with BRCM on pricing and therefore must take lower margins, which means less R&D money. ATHR is a play on the wireless chip industry including the 11n standard, which ATHR was a leading proponent of setting the standards, they then have to turn around and compete with BRCM! SMDI meanwhile is in the emerging industry of WiFi which also has a lot of promis. They too face competition from BRCM! SIGM is in the promising field of IPTV, where telecom companies are trying to get in on the triple play and offer phone, internet, and TV, much like cable is trying to do, and cut in on each other's turf. So the solution for telecom is to enter the television market via IPTV, where SIGM has a large market share. This could be huge for SIGM... They also face stiff competition from Broadcom. And for IPTV, the customers are going to be big, but fewer in number, so it's important to be able to offer volume pricing at low costs. This is where BRCM is at an advantage over it's peers. It can simply price them out of the game and continue it's dominance. I'm starting to wonder if I want to try investing in SMDI and SIGM, or go with the big company, BRCM, which seems to have a solution to many of these new technologies. ATHR meanwhile wants to be the next BRCM, you are simply buying on the hopes it can acheive critical mass and compete on price without sacrificing margins.
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