Well, I listened to the conference call. Here's a summary:
PC Products:
Modem products weak, graphics and audio had slightly higher unit shipments than expected. Some optimism about PC product margins for the June quarter (but lower revenues and possible impact from overall PC demand and price pressure). Lower R&D, targeting CPU-integration products.
Mass storage:
DVD solution production is planned for this fiscal year (announcement said Q3), well positioned for fast-growing DVD-ROM and DVD-Player markets. Third-generation read channel device has just started sampling, leads the industry, but design win for largest customer is not 100% certain (design window still open, but high degree of confidence). Lucent named as #1 competitor in read channels. New ARM-based single-chip disk drive silicon to sample mid-year.
Regarding customer design wins for mass storage products, some are confirmed, others still in evaluation. Revenues projected to decline 30% in FY99 due to read channel product transition.
Crystal Semiconductor Products:
Targeting broader market for industrial measurement (supporting more voltage segments). Also looking at TV-Video applications. Upside in professional and consumer audio (audio side of DVD). Seeing 20% sequential revenue increase for FY99.
Communications:
Winding down CardBus products for notebooks will impact revenues in the short term. ARM-based set-top product has seen good acceptance. Targeting network infrastructure/remote access markets (Internet), leveraging modem R&D. Revenues expected to be flat in FY99, up 30% for core areas.
Overall:
Forecasting sequential revenue decline of 25% (i.e. 230M to 170M) for the June quarter due to seasonal factors and ramp down at major disk drive OEM, with slight profitability, although some risk factors present. Upside in second half of fiscal year due to new products.
Redistributing R&D dollars from PC Products to other areas in FY99 (major change of direction), total R&D expenses 15% lower. Regarding fabs, long-term goal is to have 50-60% of capacity in joint-venture fabs, some recent activities to provide foundry services to reduce excess capacity in the near term (potential upside).
Not bought back any shares yet, still evaluating options of what to do with cash, with a sense of urgency. |
