MICROELECTRONICS NEWSLETTER
July 10, 1976

MEETING WITH DON HOEFLER -Thursday, July 15, 1976
Glen Madland and John Shea from ICE had cocktails with Don Hoefler Thursday, July 15, 1976. Don Hoefler's office is in the same building as the ICE office in Santa Clara, CA at 100 N. Winchester. Don spent most of the time reminiscing about the semiconductor business and talking about his new activity in establishing a consumer electronics group. He still is personally very much down on Wilf Corrigan, feeling that Corrigan is an ineffective manager as compared with Charlie Sporck.

FAIRCHILD
Information from ex-Fairchild employees suggests that last year's CMOS MOS activity was profitable. Dr. Seeley had an excellent reputation for getting technical things done at General Instruments, and seems to enjoy a good reputation throughout the industry. Rockwell needs the technology; the metal- gate P-channel is nearing the end of its useful life for new designs.

FUJITSU
More and More Japanese and European countries are looking at the U.S., both to obtain the technology and, just as importantly, to gain better contacts with the U.S. market which constitutes over half the action in LSI.

INTERSIL MERGER WITH ADVANCED MEMORY SYSTEMS
Don Hoefler and the Intersil employees are jumping the gun, since Ori plans no major action unless an immediate decision is required, or any changes, with respect to AMS and Intersil for some time to come. Ori is a very careful gentleman and will thoroughly analyze the situation before he moves. Not quite as apparent to an outsider is the fact that AMS has attracted many of the top technical people in the design of integrated circuits. It can be expected that these groups should not only come up with valuable products, but establish standards of technical performance that the Intersil analog people would have to compete with. A few years ago Intersil had some leading programs in digital/analog technology, and probably had a better understanding of the total analog business than would be generally realized.

NATIONAL SEMICONDUCTOR
National really had a blunder at their analyst meeting with Charlie Sporck's announcement of an indirect $550 million sales for the current fiscal year. Most people internally believe that National will actually achieve $500 million in sales.

MOTOROLA SEMICONDUCTOR
Motorola Semiconductor management appears to be waiting for Al Stein to pick up the reins. At the moment, Motorola is trying to retain its entire work force, and most people who have stayed through thick and thin will stay with Motorola, since they want to find out what happens when Mr. Stein comes. Doing anything else would be like leaving the movie right in the middle.

PHILIPS/SIGNETICS
Signetics is looking up to many of its customers, and the G~2 in Silicon Valley is that Signetics is again finding its way. Most people feel that Signetics can make money in the next boom.

AMI
American Microsystems has sufficient technology, even under reasonable management, to make out in the next boom. The real question is whether they can put together a strong enough entity so that they can withstand the next recession.

BOB SCHREINER - SYNERTEK
It appears that Victor has sold its interest in Synertek to Unitrode Corporation. Bob Schreiner has done an excellent job by keeping his many owners happy.

SEMICONDUCTOR COMPANIES EARNING POTENTIAL
It is ICE's opinion Intel will achieve the greatest increase in earnings because it does have the magic product plus the magic of having all plants at capacity, which will allow them to continue as a super-profitable semiconductor company. Next in margin after Intel's 25% will be, in ICE's opinion, Intersil which under Ori's skillful hands will reach a margin only slightly under that of Intel's. National probably will continue to hold the same percentage of profit, but at the same time by increasing to the $500 million range will in effect achieve the substantial increase in per share earnings. ICE would expect the increase to be approximately 50% which actually would bring the 177 forecast earnings to a shade over $2.00. Fairchild's ability to make money is still questionable and the 1977 $5-$6 per share range would seem to be optimistic.

INTEGRATED TECHNOLOGY/LSI SYSTEMS
This plant and equipment, if sold, would take an awfully good plant manager to make money even with Wanlass' smaller chip size. More and more moves of this type are frustrated by the fact that new and modern equipment has become more significant.

APPLIED MATERIALS IN THE MICROWAVE OVEN BUSINESS
The microwave oven business is very much a consumer product, and depending on advertising promotion and effectiveness in dealing with the consumer market, it would seem on the surface that Applied Materials would lose its shirt in this market.

TIMEX
With the upswing in business, Litronix may stave off Timex' acquisition and survive.

NORTEC
Hoefler was in error on Nortec, since their backlog is quite reasonable.

CASE NO. 377 (  page: 1  2  )
I haven't really checked, but this does sound like it might possibly be John Barrett of Control Data Corporation. His comments certainly fit the problems of a central research group for a large computer company.