AUDIO & VIDEO of the CEO interview
ALLIANCE SEMICONDUCTOR (ALSC) CHAIRMAN AND CEO N. DAMODAR REDDY ON THE COMPANY'S EARNINGS
SEPTEMBER 27, 2000
SUMMARY: Reddy says he sees strong bookings for the company going forward. He comments on margins and pricing environment. He says the strength of the company is in networking, communications and set-top boxes.
Bill: Shares of Alliance Semiconductor continue to move higher today on second quarter guidance. Yesterday, the semiconductor maker said second-quarter earnings will come in between 19-21 cents a share, above its previous guidance. Sales for the period are forecast between $60-62 million, compared with $19.1 million last year. Alliance, which is not a component of the Philly Chip Index, watched its stock rise nearly 40 cents to $20.50 in yesterday's trading and continues to hold steady this afternoon.
Here to tell us more is the company's chairman and CEO, Dan Reddy, joining us from Palo Alto, California right now.
Thank you for joining us.
Thank you, Bill.
Bill: Everybody is ringing their hands over the Intel warning of last week and wondering if there will are others. Are you saying the areas you specialize in are perhaps doing better than the rest of the overall industry?
I think that two components we have to distinguish here is one is Intel servicing the PC market, whereas we are participating heavily in communication side. So, the communication market is very, very strong at this point, we are seeing for the last couple of quarters strong bookings and going forward also seeing very strong bookings.
Bill: Question from a view near Tampa, Florida, wants to know based on Intel's warning, really one of the problem for them is geographic in Europe. Neil in Florida wants to know if your business has been holding up in Europe at this point.
Geographically, we are seeing very strong bookings and billings, including I think Europe also we are seeing a very strong bookings and backlog also at this point.
Bill: What are we to take of the disparity in the kind of guidance we are getting from various companies, yours, Intel's. What we hear from some of the other semiconductor maker, especially in the specialized communication area, how do we characterize this group or can we characterize it as a group any more?
I think I feel in the PC market is more or less like a mature market, the communication market is exploding market right now because of the Internet acquired, the bandwidth that shows. Those are causing the demand for components and we are participating in that market. The same time, the consumer side seeing explosive growth in the set-top box area.
Bill: We have a question from a viewer talking about margins. I mean, with prices coming down, fluctuating this year, are the margins better for the S-RAM and D-RAMs, or are there other areas that you specialize in where you get a better margin on?
I think the last four to six quarters we are seeing the stable-pricing environment or in some cases prices are still going up. For example, across-the-board, we increased the prices for the December quarter, for example. Which is, it shows clearly there is no slow down in demand. At the same time, we have moving to the higher density, higher performance product so margins will improve going forward.
Bill: Give me for instances of the kind of applications those chips are used in that you sell to.
Products we are sell going to the networking area, communication side, cell phones, set-top box, those are the areas specifically we are talking.
Bill: Everyone is talking personal digital assistants these days, are you going that way?
We are just entering that area, not a strong player.
Networking and communication side and base stations and set-top box.
Bill: Yeah, set-top boxes, do you think that will be the technology of choice in the communications area?
At this point, I think we see that one of the strengths, yes.
Bill: Nice to see you, thank you for joining us today.
Thank you.
Bill: My thanks to Dan Reddy, the chairman and CEO of Alliance Semiconductor. And here's a one-year look at the stock: up $1.44 to $21.94.
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