Tobacco Road might not lead to the Silicon Valley.

• Position: Industry Overview

North Carolina's status as a high-tech hub was belittled not once but twice in national magazines in 1997. Both Business Week and Forbes dismissed the Triangle as a Silicon Valley wannabe not producing ideas, companies or wealth at anywhere near the rate of its California competitor.

Despite the progress of the last 20 years, North Carolina still isn't the high-tech mecca many boosters would have you believe. The bottom line is, the state hasn't produced an Intel, Sun Microsystems or Hewlett-Packard. Its biggest high-tech employers, IBM Corp. and Northern Telecom Ltd., are based elsewhere. The only home-grown company that comes close is Cary software-maker SAS Institute, run by low-profile billionaire Jim Goodnight. And the biggest news he made in 1997 was buying a controlling stake in Durham-based Midway Airlines.

North Carolina's prospects of developing another high-tech hefty dimmed in 1997 when it lost two Raleigh contenders. Medic Computer Systems Inc., a maker of medical software, was sold in September to British computer company Misys PLC for $923 million. Exide Electronics Group, which makes uninterruptible power systems, was dealt to BTR PLC, a British conglomerate, for $585 million.

Industry pundits predict Northern Telecom will see demand for its telephone switching equipment wane in a few years once phone companies finish swapping out old switches for digital ones. That didn't deter the company from breaking ground in October on three office buildings in Research Triangle Park, totaling 300,000 square feet and costing $145 million. The company forecasts demand abroad as less-developed countries improve their phone systems and at home from the Internet's growth.

IBM isn't as optimistic. The Armonk, N.Y.-based company, admitting it misjudged demand for high-end personal computers in its Aptiva line, is reorganizing its PC division, based at RTP. By mid-October, it was paring ranks in Charlotte, offering buyouts to roughly 800 contract workers. In November, it began laying off employees in the Triangle. Spokesman Bob Page refused to say how many RTP employees would lose their jobs. Over the last few years, the operation has been spared deep cuts because it's home to several divisions, such as network hardware and software, that have continued to thrive.

Charlotte-based Broadway & Seymour Inc. saw the end of its year-long reorganization. In February, the financial- and legal-software company announced its first quarterly gain - $1.1...