C.K. Hong, Chairman and CEO of Netlist, Inc. (NLST), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - May 30, 2013 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Semiconductor Capital Equipment - Cloud Computing, Mobile Device Consumer Demand - Semiconductor Inventory Burnoff - Improvement from Cyclical Bottom - Semiconductor Capital Equipment Spending - New Computing Platform Demand

Companies include: Netlist Inc. (NLST) and many more.

In the following excerpt from the Semiconductors Report, the Chairman and CEO of Netlist, Inc. (NLST) discusses his company's strategy and the outlook for this vital industry:

TWST: Last year you continued to evolve your business model from one that is concentrated on customized projects for individual clients to one that is driven by multigenerational solutions that serve a broader market. Why did you decide to make that strategic shift and have you been successful in making that transition?

Mr. Hong: Many products companies start out with a pull business that's based on one-off projects for OEMs and other customers. Over time, these companies do a lot of projects and accumulate skills and intellectual property in-house. The better companies take those assets and then create products that can be pushed out into the market and generate demand across a broad customer base. As a result, they move from a pull business model to a push business model.

We wanted to be one of those companies and evolve from a projects- to a products-based business, and while a custom-projects business is very profitable, it is dependent on one customer at a time. The projects-based model is also very cyclical, and we wanted to have some multigenerational market products that can create more stability, multiple revenue streams and multiple customers. So that's the reason why we've been transitioning our business model.

Over the last 18 months since we last talked, we made very good progress on that transition with HyperCloud and NVvault technologies, which are garnering a lot of great interest from both OEMs and data center operators. HyperCloud has been qualified at both IBM and HP, and NVvault is qualified at Huawei. We made the right decision with this strategic shift, and we continue to make progress in this transition.

TWST: Can you give us an overview of the new product lines you are now focusing on?

Mr. Hong: Our two main flagship product lines are HyperCloud and NVvault. These are distinctly different products, but catalysts for both are really the secular trend of cloud computing and this massive growth of data that's being created by multiple factors, specifically the growth in mobile. For every 500 smartphones that are sold, there is a server installed to support that traffic. With that, you have social networking, search business, and all of that creates tremendous nonsequential data.

To handle nonsequential data...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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