EONEWS: Your appointment comes after considerable success in the semiconductor industry. What can you bring to the job and what do you see as your priorities as Ceo?
WATERS: I’ve managed analog semiconductor businesses since 1998, so I know this space well. IDT, of course, is a well-established company with leadership positions in key technologies, and a remarkable team of technologists. My top priority is to sharpen the focus of the company so we develop products that are built on our strengths while extending our reach into key and emerging markets.
EONEWS: How would you describe IDT’s business model?
WATERS: We are delivering essential semiconductor components to key markets through direct sales and a network of distributors.
EONEWS: What changes do you intend to make to that business model and how are any changes progressing?
WATERS: We’ve focused the company into three major market segments that we believe will provide for considerably higher than industry growth. These are Communications Infrastructure, which is about 2/3 of our business today; High Performance Computing, about 24% of our revenue, and Advanced Power management, which includes our Wireless Charging products. We believe we have significant content we can capture in each of these segments, and that all three segments will grow faster than the overall market. So we are very committed to top line revenue growth, and are starting to deliver that already.
As we achieve revenue growth, we will also demonstrate very strong operating leverage. We don’t have to spend much more money to grow the company, and our operating profits and free cash flow will demonstrate very high leverage.
EONEWS: What do you see as the company’s strengths and weaknesses – or at least where do you think it could do better?
WATERS: The company has many strengths, including tremendous tier 1 customer relationships, a very robust R&D capability, and a strong operations culture.
On the product level, our strength is that we offer a wide array of leading products that our customers are using to develop today’s hottest innovative products. Our timing products are utilized for big-data applications in communications, and we’ve gained strength with our RF, RapidIO, wireless charging and low-power products.
EONEWS: With a cash pile of over $430m are you looking at acquisitions? What kind of businesses would you be interested in?
WATERS: We’re in a great position where we don’t need to acquire to grow our company well. Acquisitions would need to fit our existing market segment focus and provide visible acceleration to our market share gains and company profitability levels at least as good as IDT today.
EONEWS: How are you addressing the needs of your key markets – communications; computing and consumer?
WATERS: We are providing essential components in each of these markets, focusing on today’s demands in the areas of low-power, big data and wireless. In communications, we offer leading RF, RapidIO and advanced timing products; in computing, our memory interface products include a DDR4 solution that delivers best-in-class power, performance, and quality; and in the consumer space, we continue to launch new wireless power products that are gaining strong design-in traction.
And we continue to stay deeply involved with standards groups to help drive specifications to advance the industry. In the area of wireless charging, for example, we are either on the board of or a key member of each of the primary associations: the WPC, PMA, and A4WP.
EONEWS: What markets do you see as driving growth for the business
WATERS: Wireless infrastructure will continue driving growth. The volume of data involved in today’s communications requires precision timing devices.
High Performance Computing continues to drive demand for high performance memory, which we are a market share leader in. Advanced Power Management is a large market that we are just starting to deliver products and grow revenue in, starting with our PMICs for Intel reference designs and Wireless Charging products. The key driver for this is Mobile.
To maximize customer and shareholder value, we transitioned away from lower margin PC-related products.
EONEWS: Will the mix of products supplied by the company change? Looking forward how will that product mix change?
WATERS: Power management will become a larger percent of our revenue simply since it is relatively new and the smallest today. We expect strong growth from all target market segments.
We will continue to train our sights on where the latest advances and trends are headed, and provide the technology our customers need to get there.