I see what you mean and I agree about the acquisitions being basically a waste of money. I was thinking more in terms of the people and the culture. Intersil now is a Silicon Valley company, and Rich Beyer came from Elantec. Harris was based in Florida. What percentage of the old-time employees would you estimate were from Harris, Elantec, and Xicor?
My point is Intersil is principally Harris Semiconductor and not a product of acquisitions. They had more sales per quarter in 2001 than they did last quarter (Granted, they sold the wireless business in 2003).
I don't see Intersil getting any revenue from Xicor's old product lines and if you know of any Xicor products Intersil is selling, please let me know. The situation with Elantec is more debateable. There was a lot of product overlap with DC/DC converters, line drivers etc. but the buyout did bolster Intersil's power management line. However, Elantec's vertical growth was in optical storage & flat panel display where Intersil today doesn't have a presence.
In short, my observation is these past acquisitions you named were such disasters that they haven't added significant revenue to Intersil so at its core, you still have one company, Intersil, and not some semiconductor conglomerate. Nearly, $2 billion was wasted on those two co.'s although most of it was in Intersil shares when they were double or triple today's price.
I believe the revenue flatness is caused by two problems:
1) Economic factors related to secular demand in semi's
2) Loss of market share in existing markets.
Item two appears to be happening already in some product lines. Check the analyst's questions on previous conference calls pertaining to the Intersil acquisitions. The answers by Bell appear to be somewhat defensive and certainly do not contain much in the way of positive revenue news. Part of the reason that layoffs were necessary is because these recently purchased little companies are not bearing fruit but do add millions in op-ex. Or so it would seem from the outside.
Interesting discussion! It will be fun to see how it goes forward from there.
I'm not as funny as Dowboy. :-) The environment for growth in semiconductors is very challenging at the moment. I base this on two facts: 1) most TAM's are over-served at the moment. 2) general state of the world economy.
The "top 10 growth drivers" will probably see 2 out of 10 kick in. This will likely offset Intersil's shrinking market share in existing markets but will not be enough to power Intersil towards $750M annual revenue any time soon.
Expect a nice positive bump in the EPS for a while due to last week's op-ex cuts but this won't last forever. So my forecast is for flat revenue for the next 18 months with EPS re-tweaked upwards due to lowering of expenses. By the way that 11% cut was painful. Don't think of 11% of Intersil's employees as dead wood. Not the case. Let's see how my prognostications hold in 12 months.
Yes...I know what they see. It's called a 15 cent improvement in EPS now that layoffs are complete. This isn't growth. It is cost cutting. Don't be fooled. This will only work for 12 months or so. Revenue upside? Not likely!