Maxim CEO's Impressions from China Trip (MXIM)

| About: Maxim Integrated (MXIM)

Maxim Integrated Products (ticker; MXIM) which engages in the design, development, manufacture, and marketing of a range of integrated circuits reported Q2 2006 earnings last week. The following are highlights from management's conference call with analysts:

Q - Michael Masdea

Last question, just at least the word in the valley is that you took a trip to China and had an interesting experience. If that is true do you want to give us your thoughts on what you saw over there?

A - Jack Gifford

I was very impressed by the capitalistic nature of the Chinese economy. They are extremely western in their views and in their business practices and I think as you say, maybe contrasted to doing business in Japan I think it is going to be much more exciting and I think there will be a much more aggressive market available to us in China than in the, say the Japanese market, the twenty years ago or thirty years ago how it was much more difficult for western companies to do business. I don’t see that in China. I certainly don’t consider China as a global threat if I did ever, but I did I guess at one time. I don’t any longer.

Q - Tore Svanberg

And you mentioned that China seems to be more exciting than Japan. Any particular end markets you think that Maxim would have a significant role in China?

A - Jack Gifford

Well, China, I probably overspoke on that. China is I think what I intended to say was that China is going to be an easier market to do business in than Japan is and was. We don’t do very much business in Japan. We expect to grow significantly in Japan also. It is just, we’ve had difficulty being a small company growing in Japan as a bigger company things become easier, but Japan is, our market share in Japan is quite low, and we think that Japan has got a, is a significant growth opportunity for us as well as China. In China there is virtually every market available to you that you’ve got in the United States from telecom to televisions to industrial. And they’re also, not only are they an exporter but I think frankly, the major market in China is going to be as much internal consumption as it is going to be export, and that you differ, that differs a little bit from, quite a bit from the Japanese market. The Chinese market is going to probably mirror the American market in mix.

Q - Ramesh Misra

My second question was in regards to China, how much does it contribute to your revenues today and where do you see that going?

A - Jack Gifford

China is a very small percentage of our revenues today. I see it increasing dramatically over the next five years.

Full transcript here.

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