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NetLogic CEO: We Can Still Grow in Slow Economy

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    Ronald Jankov, NetLogic CEO, on his business' growth and market performance.

  • Duration 3:30
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Growing demand for mobile phones it could prove to be very good for the business according to the CEO of one of my compelling stock says business.

-- -- systems actually make the semiconductors that are crucial for those devices Ronald.

Rob before we talk about your business and your industry I just need your help.

All -- what do you make of the torme oil that we're seeing with the stock market their credit downgrade of America.

What does this all mean from your perspective as a CEO of a global company.

Well I think that we can expect that -- certainly in a strong economy we would be growing even faster than we're growing right now.

But the major transit -- exposed to as you mentioned mobile infrastructure.

We expect that still gonna grow even in a very very -- poor economy for example through the 0809.

Recession.

Smartphones continue to gain traction and their applications such as the video downloads -- -- -- continued to gain so.

We think that even in a slow economy.

RR chips that sell into mobile wireless infrastructure can still gain that significant traction.

So in other words that you unless you have an opinion whether or not we're going into a double dip recession -- them more than more than anything else it sounds like you're saying.

Your businesses essentially recession proof anyway.

Yes you know I'd say certainly we would grow even faster in a strong economy but.

Yes I would say that we can grow in in a recession we did the last one and all the indications are.

That the infrastructure has to be beefed up even in a recession again a couple of examples you know there's a lot more video going around that the applications that run on these phones.

Are a lot more complex and that's really stressing the Internet but also were in the transition right now moving from.

The older two G to three G in places like China and in places like the US and Europe we're moving from three -- to forgy.

What this means that the download speeds are much higher that the quality of service as much better.

And the require much more advanced semiconductors itself -- more money so our dollar content and removed from QG to three -- to forgy increases so.

Even at the same number of boxes are sold.

Our dollar content is is higher -- business goes up.

We have board up while you're speaking of some your competitors is really that the challenge for you then.

Right now just really pricing in other words it sounds like OK then speeds are gonna get better people adapt to -- everyone once they have video on all the devices.

What's the real challenge for your industry then is it just pricing going lower and lower.

Well it you know I mean interesting our gross margins have been going up steadily for the last that even during that the soft first half.

Our gross margins reached a record of 75%.

Record for the company one of the highest in the industry.

So of course there's always competition but the design cycles are very long and communications and our products are highly differentiated so.

Even in this very competitive environment we've continued to increase our gross margins and we're now it to record gross margins for the company so.

I think that our products are differentiated enough that we'll be able to continue to command a premium gross margins and as an example we brought.

Four major new products to market the first half of the year.

All of them very very differentiated and that's gives me -- significantly expanded.

500 million.

At the end of last year to over two billion this year so.

Those again are high gross margin products that allow us to keep highly differentiated gross margin.

I -- tell your stock is not a lot but almost everyone on the street has a buy rating and you guys so you must be doing something right Ron Dan Coats CO netlogic thanks a lot.

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