__________________________________________________
― THE FRIDAY LETTER ―
(e-mailed weekly, from Gilder Publishing,
for friends and subscribers)
__________________________________________________
| http://www.gilder.com/
| Issue 194.0/March 25, 2005
SIGN-UP A FRIEND FOR FREE!
Click here to add a friend to our Friday Letter mailing
list.
HEADLINES:
▪
The Week / Cavium, NetLogic, and EZchip
▪
Friday Feature / A Power Portfolio
▪ Friday Bonus / More Current Account Confusion
▪ Friday Bonus II / 2004 Chipmaker Rankings
▪ Readings/
The
Week/ Cavium,
NetLogic, and EZchip
‾‾‾‾‾‾‾‾‾‾‾‾‾
Excerpted from the Gilder Technology Report’s subscriber-only message
board, available online for GTR subscribers at http://www.gildertech.com/logon.asp.
GTR Subscriber Question 03/16/05: Anyone have any thoughts about how EZchip fared
against Cavium and Intel at the Microprocessor Summit?
George Gilder’s 03/21/05 reply: Cavium's OCTEON is more a threat
to NetLogic (NETL) devices, as both function in layers four through
seven, supplying security, load balancing and toll services, as does the Intel
(INTC) 2800 processor that was presented in the San Francisco Embedded Systems
Conference. Strictly speaking these chips are co-processors that add high-end
services to the 10-Gigabit wirespeed packet-parsing, shuffling and switching
network processors such as EZchip's (LNOP) NP-1c and NP-2.
EZchip's
architecture can cover all the seven layers, but the Intel, NETL and Cavium
devices, with their costly combinations of hundreds of millions of transistors
and large fast off-chip memories, excel at present for the high end
applications, and among them, NETL has the most notable design wins [Cisco
(CSCO) and Huawei]. With advances in Moore's law over coming years,
EZchip will increasingly be able to obviate and usurp these co-processors with
single-chip systems.
Meanwhile,
EZ is pursuing the largest current markets. EZ CEO Fructer comments on the
conference: "Very few people attended, mostly competitors. As for Intel
and Cavium, we see now very little of them as a result of their focus on
advanced services and EZchip's focus on line cards. With NP-2 we took a
decision to focus on the much higher volume line card (10 cards and more per
chassis) market and included the features that are required by that market.
Intel and Cavium are at the advanced services cards where you have one per
chassis."
Under
pressure from the specialized co-processors now dominating the upper layers, I
sense a move by EZchip …
Logon to http://www.gildertech.com/logon.asp today to learn why George
Gilder senses a move by EZchip (LNOP) toward a more disruptive strategy as well
as his thoughts on NetLogic’s (NETL) “ingenious upmarket device” and its
prospects of hollowing out the super-switch routers from makers such as Cisco (CSCO)
and Juniper (JNPR).
*** ANNOUNCEMENT ***
George
Gilder is scheduled to speak Friday, April 1, at Duke Law’s
Intellectual Property and Cyberlaw
Society’s 2005 Symposium.
Details available at: http://www.law.duke.edu/student/act/intprop/
|
The Gilder
Technology Report is about technology, not the
short-term gyrations of the stock market. It is our mission to
understand the latest technologies at a fundamental level, filter out the
hype, and determine which companies will succeed in tomorrow's economy. |
Friday
Feature/ A
Power Portfolio
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
At first glance, hybrid car economics just don't make sense. A conventional
engine costs about $70 per horsepower-or, in electrical units, about $50 per
kilowatt. Now add the extra cost of going hybrid: The power electronics
required to convert horsepower to kilowatts run $6 a kilowatt, battery packs
add another $25, and then you need electric motors, at $15 a kilowatt, to turn
electricity back into shaft power to drive the wheels. For an SUV these and
related electrical parts are going to run something like $5,000. Why pay for
all that extra hardware when it ends right back where it began, in the
mechanical power of a spinning shaft? Cut to the chase: You'll buy it, and like
it. By 2015 almost every new car and truck will be built around a hybrid drive.
Detroit hasn't witnessed a comparable revolution in automotive technology since
the days of Henry Ford. Companies that catch the wave are going to prosper.
Read
the complete article by Peter Huber and Mark Mills:
http://www.forbes.com/business/free_forbes/2005/0411/076.html
|
Available April 1 … Available Now to Pre-Order on Amazon.com:
http://www.amazon.com/exec/obidos/ASIN/0393057631/gilderpublish-20/104-7493271-7363927
|
Friday Bonus
I/ More
Current Account Confusion
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
Last week’s news that the 2004 U.S. current-account deficit had hit an all-time
high was met with the expected negative commentary. Lehman Brothers chief
economist Ethan Harris called the ’04 number “abysmal”; the Wall Street
Journal’s Justin Lahart pondered whether “the rest of the world will tire
of writing IOUs”; and USA Today cited Warren Buffett’s recent quip that
the U.S. could become “a sharecropper society” if its transfer of assets to
foreigners continued.
Buffett’s comments merit special attention in that it is precisely because the
U.S. is moving away from low-value sharecropper jobs that the current-account
deficit is so high. In truth, the impressive performance of Buffett’s Berkshire
Hathaway is directly related to the fact that the current-account deficit has
been rising almost continuously over the last 25 years.
The explanation for this is very simple. When Americans send dollars overseas
to import low-margin products such as paper clips, t-shirts, and CD players,
the current-account deficit rises.
What the Buffetts of the world apparently miss is the great economic success
story that allows us to be such prolific consumers to begin with. That story
has to do with the dynamism of U.S. companies and their focus on what they do
best, and how these companies send overseas the low-value work that hogs
limited resources and crowds out innovation at home.
Read John Tamny’s complete article:
http://www.nationalreview.com/nrof_comment/tamny200503240856.asp
Related Reading:
Forbes:
Easily Financed
http://www.forbes.com/columnists/global/2005/0314/011.html
Our
Supply-Side Fed?
http://www.nationalreview.com/nrof_comment/kaza200503230835.asp
|
Announcing … The 9th Annual Gilder/Forbes Telecosm Conference: September 27 – September 28,
2005 The Resort at Squaw Creek, Lake Tahoe |
Friday Bonus II/ 2004 Chipmaker Rankings
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
In Dec. 2004 iSuppli (El Segundo, Calif.) predicted that
worldwide semiconductor sales would hit $237.1 billion in 2005, up 4.7 percent
from $226.6 billion in 2004. Prior to that, the market forecaster had predicted
9.6 percent growth in semiconductor revenue in 2005.
Worldwide
semiconductor revenue growth in 2004 was 24 percent, compared to 14.9 percent
in 2003. Only 22 companies, representing less than 10 percent of the
semiconductor suppliers in iSuppli's market coverage, saw their revenues
decline. Only five of those companies suffered revenue declines of more than 20
percent, according to iSuppli.
Read
the complete article:
http://www.eet.com/news/latest/showArticle.jhtml?articleID=159904648
View iSuppli’s chart of top 20 chipmakers ranked by 2004 sales:
http://i.cmpnet.com/siliconstrategies/2005/03/market_2.gif
_______________________________________________
Readings /
‾‾‾‾‾‾‾‾‾‾‾‾
Lexar Awarded
$380M In Toshiba Case
http://www.reed-electronics.com/electronicnews/article/CA512693?nid=2019&rid=2052959400
Infineon,
Rambus Settle All Litigation
http://www.reed-electronics.com/electronicnews/article/CA511941?text=rambus
Texas
Sues Vonage, Charging Misleading Advertising
http://www.securitypipeline.com/showArticle.jhtml?articleId=159904391
Paper
Chases Digital
http://www.forbes.com/infoimaging/2005/03/23/cz_0323findsvpdigitalpaper.html
Siemens’
Small-Picture Thinking
http://www.forbes.com/infoimaging/2005/03/18/cx_pp_0318siemens.html
Military
Plays Its ‘Smart’ Card
http://www.technologyreview.com/articles/05/03/wo/wo_hoffman032205.asp
Sony
PSP Great For Games, Not Much Else
http://www.forbes.com/infoimaging/2005/03/23/cx_ah_0323tentech.html
_______________________________________________
SIGN-UP A FRIEND FOR FREE!
Click here to add a friend to our Friday Letter mailing
list.
_______________________________________________
FRIDAY LETTER STAFF
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
Mary
Collins / mcollins@gilder.com
Sandy
Fleischmann / sfleischmann@gilder.com
ADVERTISING
INFORMATION
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
The
Friday Letter is mailed each week to more than 150,000-plus subscribers and
friends of Gilder Publishing, including industry leaders, financial
professionals and individual investors. For information about advertising,
contact Mary Collins at mcollins@gilder.com
PLEASE NOTE: The appearance of an advertisement in the Friday Letter does not
indicate an endorsement for the product and/or service by George Gilder, Gilder
Publishing LLC, or the Friday Letter staff.
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
Send
letters to the editor to Fridayletter@gilder.com
For
technical problems, please e-mail Fridayhelp@gilder.com
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
Gilder
Publishing, LLC
ATTN:
Friday Letter
291A
Main Street
Great
Barrington, MA 01230
_______________________________________________
The
Friday Letter
is published weekly for subscribers and friends of Gilder Publishing. If
someone you know would enjoy it, please feel free to forward a copy.
Gilder
Publishing makes the Friday Letter available for free. To help defray some of
the costs of producing this information on a weekly basis, we will from time to
time be sending you offers from companies we think you'll be interested in.
These offers will not come more than once a week. If you do not wish to receive
this related information, please opt out of this process at the link below and
we will not share your name with companies outside of Gilder Publishing.
http://www.gilder.com/unsubscribe/specialproducts.php
To
SUBSCRIBE
please visit http://www.gilder.com/
To
UNSUBSCRIBE
please go to http://www.gilder.com/fridayletter/unsubscribe.php
Trouble
subscribing or unsubscribing?
Email
info@gilder.com
_______________________________________________
Copyright 2005 Gilder Publishing LLC
