Since you seem to have researched CY for quite long time, I may obtain some kinda of help from you. I always had trouble to evaluate this division since revenue seems in a trend fading away despite its excellent gross margin. In this latest cc, it sounds a bit re-knidle the hope in this division in some new products growth area.
I wonder if you can analyze the current products and what's the evolution from there?
Afraid I don't have much to offer. DCD won't grow unless the communication equipment sector grows again. The last time I expected that to happen was 2004. The days of Lucent and Nortel as key customers for CY are gone. But maybe there's more going on than I realize; CSCO stock price has shown some life lately. I don't rule it out; I just don't know any positive reason to expect it to grow again. Perhaps someone else does.
I think of DCD as a cash cow, if a possbily dwindling one. CY will grow, but it will be in other divisions, including, per the last CC, in new markets, with PSOC the cutting edge.
Part of the CY strategy seems to be combining PSOC with other product lines. In this particular regard, I wouldn't rule out DCD from that equation.
In August, 2004, CY laid out a plan for growth (Schwab Soundview, August 12). CY subs were presented as the key, including Sunpower, Image Sensors, PSOC, MRAM, and SLM. Of these, PSOC is exceeding plan and Sunpower is essentially on plan. MRAM has been cancelled, Image Sensors are behind plan, and SLM was supposed to start growing sometime this year. I would have to guess it's slightly behind. CY went into some detail on everything but SLM; whatever they're doing there, it's still under wraps.
And, of course, the story has changed a bit. CY is still looking for growth, but the emphasis on divesting or harvesting low margin, low growth areas, on going after cash flow, and even, to some extent, on outsourcing surplus production needs, is new.