All: XILINX CEO calls the bottom:
CNBC - SQUAWK BOX
XILINX CEO WIM ROELANDTS
JUNE 11, 1998
Mark: Xilinx was also one of the most actively traded stocks
on the Nasdaq. Shares of that company lost more than a
point, closed at 34 1/2. Stock has been trading at a range of
28 1/2 to 57. Taking a look at some technical factors on the
stock: the moving average convergence divergence bearish
50-day moving average is bearish and Tradestation expert
says it's in the short-term and long-term downtrend, that
from Omega Tradestation. Right now - sorry, I was looking
at something else. Right now, Xilinx is up 3/4 35 1/4. Joining
us now from Palo Alto, California, with his read on the
semiconductor industry, Wim Roelandts, he's CEO at Xilinx.
Good morning sir, thanks for being with us.
Good morning
Mark: What is going on? Can you see a bottom in the chip
business?
Oh yes, I think we are probably near to the bottom. This
whole industry is in a second recession in two years driven
this time by demand caused by the weakness in the
Asia-Pacific region and some segments like the PC
industry.
Mark: Do you think -- well don't you need a recovery, in
Asia, to call a bottom?
Not really. I think that clearly the Asia situation is hurting
us, but it's a relatively small
part of our business.
Mark: Are you speaking in terms of your company, now?
I'm talking about my company specifically, but also the rest
of the industry.
Mark: Small part of the business?
Yes. You know we are more on the high-end side of the
programmable logic
industry. In total, we sell about 15% of our business, in the
Asia-Pacific region.
Mark: Let's clarify too what your company does. These field
programmable gatorades, FPGA's are and correct me if I'm
wrong, are simply computer chips that can then be program
the way the buyer wants them to be programmed later on,
right?
That's correct, yes.
Mark: So, if I'm making a toaster or a car or whatever and I
want a chip in it that will do a certain thing I can buy the
FPGA from you and worry about programming it to do what I
want it to do later on?
Well, it's really more, something more in the high end of the
electronics industry.
Telecommunications industrial electronics things like that.
And the big thing -- the big advantage of our products is
really the helps our customers get their products into the
market quicker and, of course, in the high-tech industry, this
is very important.
Mr. Roelandts, Bill Meehan at Cantor Fitzgerald. The SIA
reported the other day that sales to the Americas had fallen
year-over-year to a much greater extent than the
Asia-Pacific area. Are you experiencing that type of decline
here in the states, also?
No, not at all. Our business in the states is slightly up over
the last, I would say, the last
couple quarters. Our biggest weakness has been in the
Asia-Pacific, you know, but the
U.S. and especially Europe are doing pretty well for us.
Mark: It's my understanding that where you're seeing an
awful lot of strength is in networking-related sales, right?
That's right, especially in telecommunications doing very
well. Also the instrumentation part of our business, you
know, industrial electronics measurement equipment is also
doing very, very well.
Mark: So you've been doing better than the semiconductor
industry, as a whole. Do you expect to continue that?
Well, you know, the main reason why we are doing better
than the industry, in general, and than some of our
competitors is that Xilinx, at this moment, is in a very, very
strong product position. So, that really helps offsets some of
the weakness in other parts of our industry and our
business.
Mark: Mr. Roelandts, we hope things work out as you
expect them to.
Thank you very much.
Mark: Wim Roelandts, CEO at Xilinx, joining us from Palo
Alto, California.
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