Omnivision FQ108 Earnings Call

Seeking Alpha published Omnivision quarterly call transcript from August 31. Some interesting citations:

Shaw Hong - President, CEO:

"We have already secured design wins with TrueFocus and anticipate meaningful revenue in calendar 2008. What we have learned from the handset maker, who continues to be very excited by these technologies, is that having the sensor and DSP functionality on a single chip is a critical requirement. We are already being announced on multiple projects to develop single-chip wafer encoding products."

"We are seeing a dramatic increase in image sensor attach rates in the PC notebook market. We believe that the total market will be about 20 million to 25 million units in 2007 out of a total of 100 million laptops. This is a much faster attach rate than we originally anticipated. With design wins at four of the five leading manufacturers, we have a dominant market share."

"We are currently working on 1.4-micron pixel size and beyond."

"We are making progress with PFC in developing new processes and new products using their 300mm DRAM capacity. We expect to begin production on the larger wafers in the second half of calendar 2008. VisEra made further progress in their program to expand their capacity and to prepare their facilities to handle 300mm wafers."

Peter Leigh - CFO:

"Gross margin for the first quarter was 23.4% compared to 22.3% last quarter. Excluding stock-based compensation expense of $953,000 gross margin was 24%."

"The question of whether or not you could really get margins back to the mid-30s I think is much more complicated. My short answer is that you really are going to have to develop some truly innovative products that provide you with a significant advantage over the competition."

"The 3-megapixel sensor that we introduced in June on OmniPixel3 technology has a 1.75-micron pixel. We believe that that 1.75-micron pixel is at least as good as and possibly even better than any of the competitors' products. We are very comfortable showing that pixel off to any and all of our customers against any and all of the competitive products. So we think that we are right up there as a market leader in that particular important product characteristic."

"There are no immediate plans for migrating to 300mm at TSMC."

"We have a long relationship with PFC, but this is a new initiative for us and for them, and it is going to take a little bit of time to develop processes on the DRAM manufacturing process. Remember, our existing sensors are made on a logic process, so there is a lot of work to be done and we think that it is realistic to expect that we will get production in the second half of 2008, and that the economics of this [300mm DRAM process] will be very favorable."

"It is very clear now that what we have to do is to integrate wafer encoding into the single-chip solution in order to make this a mass-market product."

Ray Cisneros - VP Sales:

"We have already introduced the OmniPixel3 in our 3-megapixel product line, and we expect that to be contributing to revenues sometime by mid-2008."

"Our [product] mix was roughly slightly above 70% for VGA, 15% for megapixel and above 10% for 2-megapixel."