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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (76540)	5/4/2001 10:03:33 PM
From: puborectalis	Read Replies (1) \| Respond to of 99985

PMC-Sierra sees no sign of communications order upturn By Robert Ristelhueber EBN (05/04/01 17:51 p.m. EST) SAN FRANCISCO --There have been no signs of a recovery in orders from large communications equipment OEMs, according to a top executive of chip maker PMC-Sierra Inc. "We still don't see any bookings to speak of from the Big Five" equipment makers, John Sullivan, vice president and chief financial officer, told analysts at this week's JP Morgan H&Q Conference here. "I think we've still got maybe five months left of tough sledding before we see a turn in the business," he said. “But then the turn in business is almost guaranteed, unless carrier capital expenditures goes down any further, because in the end it's the end demand, people using the Internet, that matters.” Sullivan added that, “all the cancellations are behind us. There's a small backlog, but it's all real.” The recent personnel cutbacks at PMC-Sierra were “very painful. These guys are so precious, their skills are so precious. Out of the 230 (laid off) there are 200 we would liked to have kept.” Explaining how the Burnaby, British Columbia-based company made its cutback decisions, Sullivan said, “the first thing we did was recognize the things that weren't going well anyway. And so we had a traffic management device that was supposed to come from the Extreme Packet Devices acqusition. It was late, further late, the design wins that we thought we had started peeling away as people sought other options. “They had 60 people, today only about 13 of those people are left because they just didn't execute," Sullivan said. PMC-Sierra had acquired Extreme Packet Devices in March 2000 for $415 million. “There was a project that was never announced over in Ireland, a group of nine people. They didn't perform, so we cut them. “We had a dozen people in Denver and another dozen in San Diego, and they were good people doing good stuff, but they happened to be a small group and they weren't mobile, and we just said we had to cut back on the number of locations we had,” Sullivan added. Despite the cutbacks, PMC-Sierra's employment had gone from 600 people to 1,700 last year, “so it's not like we don't have a lot more resources available than then.”