I just listened to the SWKS Analyst meeting. It was extremely reassuring and was one of the best discussions on handset technology and clearly defined their complete leadership in the handset market. It also had all the slides that were shown to the analysts: numbers, charts and full color pictures of handset designs and solutions. Strongly recommended, its 2 hours. Dave starts and clearly displays his total knowledge of the industry, its customers and what is driving the future. His 50 minute presentation sums everything up well, but you don't want to miss the chart on Samsung's relationship with the company during Murthy Renduchintala's presentation. <bg>
corporate-ir.net
Some points from the meeting:
Why SWKS?
-Technology Leadership
-Customer wants high end intergration
-SWKS has the broadest, most advanced tech
-Customer Diversification
-OEM's want to reduce suppliers
-SWKS doing volume biz with top 4 OEMs
-Largest RF semiconductor company in the world
-Critical mass to be low cost producer
-Take market share, size matters
Nice Garnter/Dataquest chart on PA market share (June 2002)
SWKS: 31.1%
Hitachi: 29.1%
RFMD: 25.3%
It really sounds like these guys can't wait to compete. They are also selling to IDM's like FLEX. So concerns about where ERICY's component biz went when they sold to FLEX should be forgotten. <g>
Now going to 12 phones at Samsung, highest intergrated module goes for $20! (No more $2 for PA, $3.50 PA/switch etc) That is big dollars in this industry and management is obviously pushing the high end module. Quicker time to market, lower cost and ease for OEM. (No brainer right?)
Current Line yields of 97% at final test. (very efficient and highest in industry)
Unique capability to deliver fully intergrated RF system solution.
Wireless infrastructure at 12%-15% of revs, want to go to 25%. Easy business based on handset capability, high $$$
Mexicali factory a key advantage for packaging.
-much quicker turnaround than competitors
-provides small footprint 4mmX4mm vs 6mmX6mm from competitors
-30%-50% less costs than other vendors
Has 600 RF engineers and 150 packaging engineers, largest in industry
Dec quarter targeted to be profitable
$100 mill in cash at closing and $100 mil credit line
No debt* (But Goodwill as discussed previously)
-*Does owe a note on the Mexacali plant, first payments in 9 months paid off in two payments after 12 months
Has the world's most advanced solution for a DCR
Also acquired great software from CNXT, field proved protocol stack
Improved capital utilization.
New Samsung T200 (64,000 color) handset is a SWKS solution, out Fall 2002 in Europe and China
Very competent in CDMA, GSM, 2.5G 3G, not tied to any specific air interface standard.
Expects to grow much higher than the market.
Targeting a $1 billion annual run rate (down the road)
-$250 mil a quarter
-R&D 20%
-Gross margins 45%
-Operating margin 15%
Whew! Again, I strongly recommend listening and watching the slides, the cellphone design/component lesson was worth it alone.
A-M-S |
