High-tech

Due Diligence Update: Pulsic

By The Chilli analysts

Following our due diligence in February 2004, Pulsic is still on track to breakeven at the end of Q2 2004. Headcount remains flat at 15.The company will soon open an office in Silicon Valley, building on the traction gained there through it's distribution partner. The Valley is the company's largest market, followed by Japan, where the company's technology first gained prominence. It is also gearing up to expand in Korea.

The company is leveraging its strengths in mixed-signal routing and has developed supplementary expertise in memory and datapath designs.

Pulsic now has over 30 customers, including blue chip customers, Elpida, Fujitsu, Renesas, Sony and Seiko with over 60 licenses. According to Ken Roberts, CEO, the company has recently secured a tier-one semiconductor vendor to use Pulsic's memory routing technology for complex SRAM/DRAM designs. Pulsic is also working on gaining traction in Korea, which is home to large memory vendors Samsung and Hynix. Roberts sees Pulsic memory routing technology as a key enabler to helping memory chip vendors reaching market sooner, where being first is key.

The company is considering several strategic options in terms of product offering and future expansion plans. The pure analogue space is becoming a commodity, requiring an extensive, support-hungry network. It is also looking at higher value niche of RF (radio frequency communications) and compaction (for analog designs targeted at shrinking process geometries).

The Chilli perspective: the challenge for Pulsic is to leverage its existing technology and customer relationships in the mixed-signal and memory business footprint. This may entail further investment in servicing customers and developing new products. The company should consider risking moderate dilution, or cash injection to get additional investment in infrastructure to support its future sales pipeline. There is also the possibility of strategic partnerships, with those who have the same customer targets with complimentary product and support offerings.

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© Chilli Publishing Ltd 2004

02JUNE2004