Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Shawn Hannon from Needham & Company. Please proceed.
Shawn Hannon – Needham & Company
Yes, good evening.
Mikel Williams
Hi Shawn.
Shawn Hannon – Needham & Company
Hi, if there is a way perhaps, Mikel if you could perhaps expand a little bit on some of the trends that you are seeing in terms of what is the complexity of the boards with some of your customers. You know, some of the trends in terms of taking out what have been kind of added programs that has as a result kind of biased the mix versus with your existing customers. Are there some current trends that you are actually seeing taking place there?
Mikel Williams
Are you talking about trends in the technology?
Shawn Hannon – Needham & Company
That is correct.
Mikel Williams
Okay. what is happening out there is the density, I mean in layman’s terms the printed circuit board connects the semiconductor with all the other components and also serves the purpose of providing form factor for a device. It is structured to the device. What is occurring in the printed circuit board community as you may be aware is more dense semiconductors that basically drive a higher density interconnect requirement or HDI as it is referred to in acronym, for the boards and specifically with higher pin counts under the chip. So what that does is it drives the need for the density requirements. It drives the need for increased technical capabilities on behalf of printed circuit board manufacturers such as ourselves. So we’ve seen a significant shift in the OEM community adapting to the new chip sets that are coming out, have been, and will continue to come out, and even to the extent that it is going you’ll know into the military market where they may not be quite as focused on smaller devices like you find in the consumer electronics market, but they really have to embrace these new technologies because the chipsets of the past in effect really won’t be available in the future. So we’re seeing a lot of interest and demand for our capability and in that regard and along those lines given what we have been investing in with respect to our laser technology, laser direct imaging, the laser drilling systems that enables our capabilities to meet the higher density interconnect requirements. We find that is a differentiating kind of feature in a competitive marketplace. Further, we didn’t kind of mention it yet but this process innovation that we have brought to the market and has now been out there for really about a year. I think the year, last year we first presented it to the standards committee at the ICC event up in Chicago in October a year ago. That really has now started to get significant traction for any customer who has a class 3 requirement for HDI and the military aerospace guys usually really play heavily in that area. So all of these trends that we see driving the HDI requirement deeper into the printed circuit board industry are an area that we play well in. I think Shawn, as you know, DDi was the leader and I believe still is the leader in stacked MicroVia, which is a process of allowing for greater density in the boards. As we are comfortable in that space we’ve actually been out educating the OEM community in actually one event. We just had one in Chicago or in Colorado. We just had one in Texas and will have 50, 60 engineers show up from a local community to understand these trends and then to be able to, you know, do their design work inclusive of what is happening in the market. So, we think this is a big deal. We think that the – you read about it all the time with the chips being released, where they have got chips on chips, and chips packaged in groups, clearly driving interconnect requirements for printed circuit boards into the HDI and that is our sweet spot. We have been there all along. We’re continuing to invest in that area. We’re continuing to invest not only in capital but in process innovation and I think what is underpinning our sales success. If I didn’t answer that let me know and I will try and be a little bit more clear.
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