from Changewave.com
Stock #4: Intersil (ISIL)
The next wave of computer networking involves wireless local area
networks (WLAN). And 802.11 wireless Ethernet, commonly known as
Wi-Fi, has become the wireless device communication standard.
According to a recent study by International Data Corp.,
WLAN equipment revenue will reach $1.5 billion by the end
of 2001 and $3.2 billion in 2005. Over 90% of that is
represented by Wi-Fi technology, as opposed to other
wireless protocols like radio frequency technology.
Intersil (ISIL) is the pure-play leader in the WLAN market.
Intersil provides chips for wireless access and
communications analog markets. Intersil products are
featured heavily in mobile commerce and wireless Internet
applications. Recently, Cisco reported 55% sequential
growth in their Wi-Fi business--while everything else was
crummy.
The reason this is good news is because Intersil's chips are in
just about every WLAN. It has one of the largest companies in the world on its side as well.
Recently, Intersil announced a pact with Intel to speed deployment of wireless technology and
products. Intel is using Intersil's PRISM 2.5 chip set in its new wireless products. Not a bad
company to be partnered with.
The company?s R&D expenditures are about to pay off too. A group called the 802.11
committee from the Institute of Electrical and Electronics Engineers (IEEE) recently ratified a
new standard in the WLAN industry called 802.11g. The new standard, proposed by ISIL, will
allow WLAN data rates up to 54 megabits per second (Mbps) in the 2.4 GHz spectrum.
Currently, Wi-Fi systems using the 802.11b standard have a maximum data rate of 11 Mbps.
"This is a huge win for the wireless industry for several reasons," said Intersil CEO Gregory
Williams. "First, it is backwards-compatible with the large installed user base of over 11 million
Wi-Fi products. Second, it meets our customers' demands for significant speed increases in the
2.4 GHz band, necessary for multi-channel DVD-quality video and CD-quality audio
applications."
While Mr. Williams sees this as a big win for the industry, we view this as an even bigger win for
Intersil considering it is the leader in the 802.11b market. They will develop a new chip set that
meets the new 802.11g standard in 2002, according to the company.