What do others think about TXN and ADI?If the Digital Signal Processing market ever generates its own "Gorilla", Texas Instruments is the odds-on favorite to grab the monkey suit and dance all night with our sisters.A few years ago, the company was reeling behind the last cyclic collapse in semiconductors. They brought up a new CEO, Tom Engibous, and determined to focus their interests around mixed-Analog and Digital Signal Processing and related chipsets. The company simultaneously initiated a complicated exit strategy from DRAM and military-related manufacturing, breaking off joint ventures and selling down assets while buying up key intellectual property and naiscent component producers in the DSP and broadband space. For a long time, these moves impacted the company's financial ratios cruelly.But by mid-1999, the results were starting to become obvious. Today, TXN dwarfs all other DSP manufacturers, holding nearly half the total market and dominant shares in the most lucrative submarkets, including wireless communications, computer disk-drive assemblies, broadband modems, and other networking devices. Two out of three cellular telephones manufactured in the world today rely upon TXN DSPs, and the company controls a portfolio of intellectual property and signal processing patents that would make QCOM flush with envy. This, as you'll know from your scrutiny of the coming wireless- and non-PC era, is smack in the middle of Everything Telecosm.(I know this because TXN holds the key IP behind Discrete Multi-Tone, a modulation technique for ADSL that TXN acquired when it bought Amati Communications in 1998. I followed my interest in broadband along with my Amati shares to TXN and have not been disappointed. Look at the company's chart since 10/98.)Aside from an ongoing investment in DSP and mixed-signal Analog R&D that likely outweighs all other competitors combined, TXN secures its flanks by providing "whole solutions" that enable its customers to get to market faster. These include comprehensive development tools, extensive software and hardware support, and a network of nearly 300 third-party DSP solutions providers. University engineering students who visit these boards claim that the ONLY DSP development tools and methods taught in their labs are supplied by TXN and that the company's software compilers are so sufficiently advanced as to make TXN the default platform for new developments coming out of those labs.With the DSP market said to be growing 30% annually over the next five years and a re-jiggered TXN just reaching its stride, the company is solidly gaining marketshare, even as competitors IBM, LU, INTC, and others announce furtive little R&D commitments that are a fraction of TXN's. I realize that some here will find it tactless to brandish Geoffrian metaphors in a temple to Gilder, but if this company ain't a Gorilla on the make, I don't know one.Bob Sutton
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