Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Neal Goldman - Goldman Capital Management.
Neal Goldman - Goldman Capital Management
At the current level with reduced service revenues, what do you believe your current burn rate is on cash? Obviously there was some receivable reduction last quarter and inventory reduction. So I am just trying to get a hand on the current burn rate.
Dror David
What I can say is that our cash breakeven point in terms of revenue is being reduced to around $8 million in the quarter.
Neal Goldman - Goldman Capital Management
Okay and on the insole, if you did $5 million on the quarter, you are burning $3 million essentially?
Dror David
Yes.
Neal Goldman - Goldman Capital Management
Okay, alright. Is there any, I mean, when you talk to the foundries or other sub-customers obviously in the near term there is no visibility. Historically when do these guys think that you should start seeing a pick up just because they are burning through who are not doing even replacement products?
Gabi Seligsohn
I think, reference to history these days with the new world that we are dealing with that is kind of difficult, I would say normal downturns; they have a much clearer answer. What I can say is as I mentioned that utilization rates have dropped quite significantly. We are talking levels of probably 40% to 60% utilization and fab; it usually runs at 95% to 100%.
So I think it is going to take a while until they bring up the utilization rates. What we do see though is that some of them are migrating to higher level technology nodes because of the economics of it and in some cases there are more orders coming for that type of technology. So I think it is probably going to take a while until the capacity increases come back. I cannot, obviously these days, give any sort of a forecast as to what I believe that is but with those levels of utilizations staying low, it is going to take a while. Another phenomenon that is taking place obviously is consolidations between foundries, maybe but more on the memory side to be sure, and over there, the capacity is quite significant.
So I think for the most part business in the next several quarter is probably going to be focused primarily around the development area, incremental buys will be primarily focused on allowing transition to higher technology. I think the Intel announcement of spending of several billions of dollars which is focused on dealing with existing fab and up scaling them is probably going to be the way people are going to try to approach the situation when they need to migrate to the next technology node and I think upgrade capabilities and scalability will be beneficial to those vendors including ourselves that are able to offer those.
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