The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Chris Blansett - JPMorgan - Analyst
: I think the risk probably just comes from the other tier-one LED makers. I'm not as concerned about the second-tier guys, but obviously Nichia is
a big company, they allocate to many different sectors, so you have to believe that some of their capacity that goes to consumer electronics could
be shifted over. That's where the risk(inaudible). It's not the risk in my mind of the new Korean or Chinese or Taiwanese, it's the other tier-one guys.
So as I mentioned before, I have not really seen any reputable lighting that has a second-tier LED maker die in it yet. I think that's still to come. So
I think if we do have some sort of oversupply on the consumer electronic side for the next six months, there's still-- the second-tier players are still
going through a large qualification period and before they can be big players in the general lighting application. Do we have some more questions
from the audience?
Unidentified Participant
(inaudible question - microphone inaccessible).
Question: Chris Blansett - JPMorgan - Analyst
: I had a real quick question, John, about adding these capacities in these different areas. Which areas do you consider the highest risk, maybe which
areas do you consider not as much? Logic says that packaging is kind of incremental ads, probably lower (inaudible) and that wafering and MOC
video are probably the highest. Is that the way we should look at it?
Question: Chris Blansett - JPMorgan - Analyst
: One quick question about the CapEx for next year. How much of that is tied to longer-term investments like the wafer size transition and how much
is really more tactical in just meeting near-term demand requirements, the $250 million to $300 million, how much would trim out if demand did
happen to get weak, for example?
Question: Chris Blansett - JPMorgan - Analyst
: All right. I think we have room for one more question from the audience, if we have one. We have one over here.
Unidentified Participant
This is kind of a bigger-picture question, say if you look at the demand and supply and the cost component of equations, what's happening to--
what's the trajectory on costs and what is the elasticity of demand relative to cost? Could you just give-- look out a little bit into the future here? I
know that there's capacity constraints, but what do-- what's going on with the trajectory of cost and how does that affect demand, particularly in
the commercial market?
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