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-  THE FRIDAY LETTER  -

(emailed weekly, from Gilder Publishing,
for friends and subscribers)

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 | http://www.gilder.com/ | Issue 341.0/May 16, 2008

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HEADLINES:

-  The Week / Gilder: Achronix’s Asynchronous Gains
-  Friday Feature / Does Sigma Still Have 10X Potential?
-  Friday Blogger Bonus / Can mere mortals achieve these returns?
-  Readings /

GILDER/FORBES TELECOSM 2008: The exaflood
Hosted by George Gilder and Steve Forbes | May 27 – May 29
The Sagamore Resort | Lake George, New York


Featuring Qualcomm, EZchip AT&T, NVIDIA, Equinix, Alacritech, EMC, OToy, Seldon Labs, IBM, Micron, Semitool, LSI Logic, NetLogic, Cavium, RMI, PhotonIC, ElementCXI, Luxtera, Infinera, USVO, A.viary, Lightwave, Nyquist Capital, Anadigics, Audience, Foveon, Arasor, Synaptics, Peregrine, Provigent, SemEquip, Achronix, and Nemertes Research.

PLUS:
Nicholas CARR: The Big Switch
Steve FORBES: Rejuvenating the Economy
Andy KESSLER: Who Killed Bear Stearns?
Bob METCALFE:
Lessons learned from 50 years of Internet history
John RUTLEDGE: Is China Free?
Lawrence SOLOMON: The smart money's on global cooling
 
register online today: www.TelecosmConference.com

 

The Week / Achronix’s Asynchronous Gains

Gilder Telecosm Forum Member (5/10/08): Chuck Moore has, as far as I am able to discern, created such a radically faster and lower power chip that is without peer or competition.

 

George Gilder, Gilder Telecosm Forum (5/10/08):  Why without peer or competition? As far as I can tell, the source of the gains is asynchronous and parallel operation together with clever sleep-mode and turnoff functions. Caltech computer science has been pursuing these techniques for decades. As I have written for some time, asynch and parallelism are becoming mandatory simply because a single clock pulse can no longer propagate across an entire chip within the switching delay of transistor circuitry.

So I am all for asynch--throw away the clock like Easy Rider--but every attempt so far to achieve fully asynchronous computing devices, optimized for speed and low power, suffers rigidities and programming idiosyncrasies that thwart its adoption. Andrew Lines of Fulcrum Microsystems made a heroic attempt, but Fulcrum is now focusing on networking PHYs, I believe.

Moore's SEAForth system seems to entail adopting new architectures, a new language, new testing and debugging methods, and new modes of parallelism. You can always make large gains by starting from scratch with a new 7 layer language and requiring the world to adapt to you rather than you adapting to the world. At the end of the day, the advantages (20 GigaOps with a focus on Fourier transforms that can be performed by other special purpose devices) are not sufficiently overwhelming to enforce acceptance.

A better approach comes from Rajit Manohar of Achronix, a Carver Mead protégé who built the first asynchronous microprocessor based on the MIPS instruction set and has focused on creating compilers that allow the translation of ordinary ASICs to his asychronous field programmable gate arrays.

Rajit and Carver will both be at Telecosm 2008
(http://www.telecosmconference.com/) if you are intrigued.

 

FRIDAY LETTER BOOK OF THE MONTH

Lawrence Solomon’s The Deniers and already a #3 Amazon bestseller in Canada and leaping list-wise in the US. It tells the story of "The World Renowned scientists who stood up against global warming hysteria, political persecution, and fraud."

 

Covering the range of global warming claims, from the famed "hockey stick graph" to a predicted rise of mosquito borne diseases, the book is fascinating and even profound on the flaws of computer modeling, the irrelevance of consensus to science, the crippling effects of excessive specialization, and the mounting evidence of a coming cooling trend. It ends with a cogent explanation of how carbon taxes and offsets devastate the environment. -- George Gilder

Hear lawrence solomon speak at Telecosm 2008.
register online today: www.TelecosmConference.com

ORDER YOUR COPY
(for Lawrence to sign at Telecosm, the evening of May 27):
http://www.amazon.com/exec/obidos/ASIN/0980076315/gilderpublish-20


Friday Feature /

Gilder Telecosm Forum Member (5/11/08): Broadcom’s strength is in satellite and cable TV boxes. IPTV is a totally different animal.


George Gilder, Gilder Telecosm Forum
(5/11/08): Well, not a totally different animal. It's closer to cable and satellite than we are to chimps. It entails the same essential set of functions, and a similar set of standards, which converge increasingly every year. 

My first real qualm about Sigma Designs (SIGM) came at the Needham Conference in January, when Zoran (ZRAN) presented its agenda for Blu-ray, HDTV, IPTV and related devices. Zoran may eke out its margins, but it executes. It entered the imager controller market for digital cameras with its COACH chip against STMicro (STM), Texas Instruments (TXN) and a number of others, and within the next two years it was dominant. Now it is targeting Sigma.

But, Sigma can handle some erosion of share of an explosively growing market from this disruptive threat from the bottom. Zoran's initial markets are mostly in China.

Zoran has produced a Blu-ray chip, with an integrated analog front end, that does the job for $15, enables a more compact machine, and is more integrated. And its success prompts me to believe that other companies may succeed as well in IPTV, which is a similar though admittedly more exacting challenge. Broadcom (BRCM) is a specialist in all these fields. Its failure to date is an amazing upset by Sigma.

I still hold Sigma because of its first mover advantage and large current lead. But I suspect its position will dwindle in time. If IPTV usurps various web-based video technologies, the market may support two or more chip suppliers. But my Life After Television paradigm leads me to believe that IPTV will give way to more computer oriented video systems, 3D worlds and video teleconferencing technologies.

Broadcom conceives its strategy as focused on home area networks. Today this realm is dominated by cable and satellite, but the technologies for IPTV with its DVR and Internet capabilities will soon be needed for these converging delivery systems as well. Broadcom has to master these codecs, tuners, controllers, and interrupt mechanisms, and integrate them successfully in order to continue their growth. They will have to be a player in IPTV. Broadcom also has always believed that home wireless systems would obviate all the snarl of cables and wires in the entertainment center and through the home. They will be a large factor here also and could block Sigma's UWB plans entirely.

The real issue is how fast these codec markets will grow and how effective Sigma will be in innovating in this space. Will the markets grow fast enough to provide Sigma with a 10X potential?

Find out by visiting http://www.gildertech.com/ and becoming a Gilder Telecosm Forum member today.

The Gilder Telecosm Forum

The next logical step in the evolution of the Gilder Technology Report (published by Gilder Publishing, LLC in association with Forbes Inc., 1996-2007), the Gilder Telecosm Forum is the web’s premier technology investment discussion forum.

 

To learn how to join this powerful network of talented, tech-savvy investors and thinkers online daily to debate, discuss, and decode new and emerging technologies and share valuable and actionable investment advice, visit www.Gildertech.com today.

 

Friday Blogger Bonus / Can mere mortals achieve these returns?

Rich Karlgaard, Forbes.com, Digital Rules blog (5/13/08): I spent a fascinating hour yesterday with Peter Thiel, co-founder of PayPal and now president of a $3 billion hedge fund called Clarium Capital Management.

According to the latest Barron’s survey of top 75 hedge funds, Clarium has knocked out a 40.8% three-year annualized return.

 

Disclosure about Thiel: He was briefly, in 1989, an intern at Upside magazine, which I had co-founded with a friend the year before. Even 19 years ago it was plain to see that Peter’s IQ boiled water. He was at the top of his class at Stanford Law School. For fun, he had started a conservative/libertarian campus magazine called The Stanford Review.

 

At the time, Peter aspired to be a Supreme Court justice. Instead, he co-founded PayPal and became a billionaire. Ah, darn. Peter now directs his bottomless intellectual curiosity to global economics and politics and the investment opportunities created at these intersections.

Much of what Peter told me yesterday was off the record. But he did share his deceptively simple investment map. Draw two circles that overlap a little bit. Call once circle “great businesses.” Call the other circle “businesses nobody likes.” The overlap is where you’ll find great investment opportunities.

 

This makes Peter a contrarian. He also has a fine market timing sense. He correctly called the multiyear dollar slide in 2004. I wish I had.

 

Peter is a libertarian who supported Ron Paul in the recent Republican primary. We had some fun discussing why it is that supply-siders and libertarians tend to be optimistic types. How odd it is, Peter mused, that the U.S. is moving sharply away from libertarianism and toward statism, yet the most optimistic investors tend to be supply-siders and libertarians! It’s the Kudlow Conundrum, we agreed, named after that indefatigable optimist Larry Kudlow.

 

Here are Clarium’s top holdings as of Q4 2007, according to Ticker Spy (http://www.tickerspy.com/member.php?mid=-1282816&pid=22301)

 

Can mere mortals achieve returns comparable to Clarium's? Or must one be a real genius, like Peter Thiel?

 

Check out Rich’s blog:
http://blogs.forbes.com/digitalrules/


HEAR RICH KARLGAARD SPEAK AT TELECOSM 2008
www.TelecosmConference.com

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Readings
/

The New Economics of Semiconductor Manufacturing

http://www.spectrum.ieee.org/may08/6179

Bernanke's Bubble Laboratory
http://online.wsj.com/article/SB121089412378097011.html?mod=hpp_us_whats_news

 

Smoothing Out Nano Edges
http://www.technologyreview.com/Nanotech/20761/  

 

Vodafone Buys Zyb for $49M
http://gigaom.com/

 

Whole-Body Gaming
http://www.technologyreview.com/Infotech/20717/

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Friday Letter Editor: Mary Collins George / mcollins@gilder.com
 

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