Silicon Laboratories, Inc. SLAB
Q4 2010 Earnings Call Transcript

Operator: Adam Benjamin, Jeffries

Adam Benjamin - Jefferies: As always, a lot of moving parts. Just if I got this calculation right, I mean, roughly you’re talking about access business being down about $30 million year-over-year and you look at broad-based being up about $30 million, so it seems as if the broadcast segment would be the one that drives it either up or down. I know you’re talking about the video business essentially tripling but if you can clarify, Necip, as it relates to the FM business, you’ve traditionally talked about that being up or down. I know obviously handsets are declining but how you’re looking at that business netting out for the year?

Necip Sayiner - President and CEO: One clarification, the guidance we’ve provided for the broad-based business cause for 20% to 30% growth. In dollars, that would be $35 million to $50 million for the year. We provided this $40 million increase year-on-year on video. You’re right on consumer audio in particular we will see a down year driven primarily by handsets. So net-net, we’re looking at a year in broadcast that is up strongly and access on a year-on-year basis is going to be down nearly as much as you said.

Adam Benjamin - Jefferies: Then as you think about that mix coming in, the gross margin steps down in Q1. I know that the access carried higher gross margin but broad-based was quite high as well and the broadcast is lower. So how do we think about those netting each other out? Is that really the true dynamic that's happening in Q1, because that's a pretty decent step down or is there also a pretty sizable component of cost that you had in 2010 that you are not getting in 2011 with your foundry partners?

William Bock - SVP and CFO: I think Adam, that it's a combination of those factors. The biggest impact in gross margin for 2011 will be the mix impact of video ramp, that's exacerbated in the first quarter was start-up related cost and then we think we'll see corporate gross margins improve off the Q1 level throughout the remainder of the year.

Adam Benjamin - Jefferies: Then just to clarify, the timing growth you’re talking about, does that exclude the impact of SpectraLinear? Then just secondly, you’re talking about high double digits, I'm assuming you're talking about somewhere close to 70%, 80%, 90% growth, close to what you saw in 2010.

Necip Sayiner - President and CEO: Yeah, we weren't specific about the timing growth rate, but it's going to be high. We are looking for that business to continue its stride in terms of delivering a lot of growth dollars to us. It is inclusive of the SpectraLinear acquisition and as I mentioned SpectraLinear today is on about $3 million for quarter run rate, so that will augment the organic growth that we are anticipating in the business. I think it's fair to say that within the broad-based segment in terms of growth dollars, timing will certainly the lead the charge this year.

Adam Benjamin - Jefferies: Just one last question. You guys have been adding a bunch of new segments that are starting to see some material ramps in 2011 and anything else you'd like to talk about that could start layering in as you get to the back for the year?

Necip Sayiner - President and CEO: In broad-based business, we're going to see isolation grow nicely year-on-year, short-range wireless will show a high growth rate as well that would – we expect it to sequentially improve throughout the year and in the second half of the year, we have some expectations for a ramp in human interface that will layer off.