Poorer but Wiser Samueli: Tech Boom ‘Over-Hyped’

On the day his company’s stock hit an all-time low of $21.37, Broadcom Corp. co-founder and chief technical officer Henry Samueli told a room full of eager engineering students that the technology boom of the last several years had been “over-hyped.”

“People envisioned all these great applications, but they didn’t realize it will take many many years,” Samueli said. Speaking Wednesday in a dimly lit lecture hall at UCLA, Samueli--whose $30-million gift to the university got the School of Engineering renamed for him--showed no signs of panic over the merciless pounding the Nasdaq stock market has inflicted on his once high-flying Irvine communications chip company.

Samueli, who was a professor at UCLA in the 1980s before he left for the business world, said the market blowout could have a silver lining for the world of academia. Instead of leaping into the dot-com world, lured by tales of quick riches, promising engineers are more likely to finish up their graduate studies or join the faculty, he said.

Samueli recalled that when he was a graduate student at UCLA, engineers were driving taxicabs, and no one imagined that it would become such a lucrative field.

And even as his still considerable personal wealth has plummeted along with the company’s stock price, Samueli implored the gathering of about 120 students not to think too much about money.

“If you’re going to be an entrepreneur, don’t let the money be your driving factor. Let your love of the technology be your driving factor,” he said.

Regarding the technology market in general, Samueli predicted that conditions would continue to worsen before they improve.

“Just as we overreacted on the upside, we are now overreacting on the downside,” he said. “What I am seeing is that things are still slowing down. We haven’t hit bottom yet, and I’m not talking about stock prices, but business is still slowing down.”

The slump could continue until mid-2002 before the markets recover, he predicted. “And the rebuilding is not going to be this steep rise like it was,” he said.

He predicted, however, that Broadcom will rebound strongly when the market improves.

Broadcom’s stock rebounded a bit Thursday, gaining $4.62, or 21.6%, to close at $25.99 a share.

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Karen Alexander covers high technology for The Times. She can be reached at (714) 966-5637 or at karen.alexander@latimes.com.