International Rectifier Corporation (IRF) Citi Technology Conference Call September 5, 2012 11:15 am ET Executives Oleg Khaykin – President and Chief Executive Officer Presentation Unidentified Analyst
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And the Discrete business, which because has a short lead times, it has some of the biggest upsides, people don't forecast, but it's generally becoming in weaker for September. Up for December, I tell you, I mean, what I am seeing right now is still a lot of very cautious attitude, people just kind of waiting to see kind of between now and the end of September, the December orders are going to start rolling in to the contract manufacturers and to the OEMs, and they are kind of taking wait-and-see attitude before they placed hard orders.One area where we are seeing some increased enthusiasm is more on the kind of server side, but it's mainly driven by end of the year push to meet the annual numbers of the big server manufacturers as they try to meet their annual sales calls. Unidentified Analyst Okay and terrific. Oleg Khaykin And it's generally typical every year, December quarter, they try to get as much business as they can. Unidentified Analyst Okay, okay. I think what I’d like to do before digging into each of the specific product lines that maybe take a step back here and talk about, since you and [Alan] joined International Rectifier, can you just recount some of the changes you made to the organization and sort of where you are with regard to milestones of progress towards this initial changes that you’ve made? Oleg Khaykin Well, when we joined, we identified several major problems, one was the company after divesting $300 million business to be shared with top scale with the infrastructure and footprint that goes significantly bigger than it’s a scaled wood warrant. So the other thing was, there was a significant defocusing from Tier 1 customers to Tier 2 smaller customers, which obviously shrunk your volumes and markets. And the third one, there was growing product and technology gap that would fall needed to be filled especially in the MOSFETs and IGBT technology front.
So when we joined one strategy, I had three key elements, first one was to reengage with Tier 1 customers and win with them, that’s kind of volume drives, it drives volume win with the winners also so to say. The second one is to accelerate product development to close the product gap and technology gap. And the third one was the operational transformation, changing footprint of the company and bring greater level of external manufacturing versus internal.I would say, the first two things have done very well and the company, we group kind of cycle and cycle about 50%. We’ve done very well in that respect. We have reengaged with all the Tier 1’s, we’ve got very nice attractive design win traction. The area where we’ve paused on was the operational transformation because of the market going back from 2009, pretty soon everything was riding on allocation. And to restructure your footprint, you need to transfer lot of technologies and it requires engineering resource at that foundries, as well as engineering resource internally and you need to have external capacity already in place before you shutdown your internal assets. Read the rest of this transcript for free on seekingalpha.com