quote.bloomberg.com
Intl Rectifier Sees Internet Power Chip Boost:
Bloomberg Forum
By David Zielenziger
Intl Rectifier Sees Internet Power Chip Boost: Bloomberg Forum
New York,(Bloomberg) -- International Rectifier
Corp., which invented the technology for power chips used in
electronics, expects the Internet to sustain a demand for new
products, said Chief Executive Alex Lidow.
Demand is ''skyrocketing'' for a second year as manufacturers
design more computers, mobile phones and instruments with
sophisticated semiconductors, which need compatible chips to
supply and regulate power.
''New products for Internet servers and Internet appliances
are just taking off,'' Lidow told the Bloomberg Forum.
As a result, International Rectifier's orders in January have
been about 20 percent higher than a year ago, which he said is a
good sign for the rest of the year.
Earlier this month, the El Segundo, California-based company
said second-quarter profit was $12.4 million, or 23 cents a share,
from $1 million, or 2 cents, before a gain a year earlier. That
beat the average forecast of six analysts polled by First
Call/Thomson Financial by 6 cents. Revenue for the period ended
Dec. 31 rose 29 percent to $171.1 million from $132.8 million.
Lidow, 45, who holds a doctorate in applied physics from
Stanford University, said he expects growth to continue, although
he didn't provide an earnings forecast. Prices for International
Rectifier's chips, though, have stayed high longer than expected,
which is counter to the usual cycle.
The reason, he said, is that demand for products such as
cellular phones from Motorola Inc. and laptop computers is ''going
wild.'' They need chips ''which take the energy from the battery
and converts it to exactly what the microprocessor needs at any
one moment.''
International Rectifier, founded in 1947 by Chairman Eric
Lidow, 87, Alex Lidow's father, holds most of the world's patents
for power chips. It works with companies like Intel Corp. and
Advanced Micro Devices Inc., making sure its chips are
''synchronized'' with their microprocessors that power most
personal computers.
Alex Lidow estimated the value of his company's chips on a
typical laptop PC as high as few dollars, and 50 cents to $1 in a
mobile phone.
International Rectifier now is working closely with customers
like DaimlerChrysler AG on new automotive power modules that
regulate steering and starter-alternators. These products, ''well
under 10 percent'' of sales now, are ''a huge growth area.''
Last week, the company agreed to acquire Zing Technologies
Inc., based in Valhalla, New York, for $28.5 million, to obtain
Zing's Omnirel line of modules and components.
International Rectifier plans to keep spending as much as
7 percent of revenue on research to sustain growth, Lidow said. It
also expects increased royalty payments. Second-quarter payments
were $7.7 million, compared with $6.7 million a year earlier |
