International Rectifier Corporation (IRF)
Citi Technology Conference Call
September 5, 2012 11:15 am ET
Oleg Khaykin – President and Chief Executive Officer
Just for a comment on the format, we are going to do a 40-minute session here, and 20 minutes of Q&A initially and then I will turn it over to questions for the audience, so I will give you your chance in a little bit, but we would like to kick things off. So I guess, Oleg, maybe starting from a high level question, how you’ve seen demand change here in the second half versus the first half and how are you responding to that?
Well, in the first half we saw a kind of first drop in December quarter and then as people reassess their needs, we saw nice recovery into the March. And early into the June quarter, there was a lot of enthusiasm going into the summer and feeling that September will be a strong quarter and a recovery here we come. But as the June quarter progressed, the mood had changed and exiting the June quarter, the mood was largely negative in the September quarter.
So for us, we saw a nice recovery in revenue from the trough in December quarter and we have nice growth going from 230 to 270 between December quarter and June quarter. But then going into September quarter, we saw softening
as the mood for the September quarter has shifted, and is largely persistent. What we are seeing today is a lot of kind of just in time orders, very fast kind of short cycle behavior. It tells me a lot of our distributors OEMs, ODMs really don't know what’s the demand is and it comes in and they expect the fulfillment to be very quick. Right now it's fairly easy, because we have still the inventory and we can respond relatively quickly.
Our Discrete business, which is one of the businesses, it can respond to quickest because of the shortest lead time. We saw a big pop in the June quarter, because the feeling was, the mood shifted that things are getting better and it opt, the mood shifted for the September quarter, the demand dropped. But going into the September quarter, we just reported about a week ago, and we are seeing lower quarter than the June quarter mainly, we have a big exposure to industrial and appliance space, that’s where we are seeing the biggest weakness between Europe and China.
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