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TWST: Are you positioned to take advantage of this change in the marketplace?

Mr. Waechter: Yes, we (Nasdaq:SPCT) are well positioned to support these trends. We have been focusing on expanding our product portfolio and have been diligently working on our development processes because time to market is critical. With our new product development process, we can get to market quickly in large volume for the new products and diversify our customer base.

TWST: Given the rapid growth in this marketplace, what’s the barrier to prevent competition from coming in and challenging you?

Mr. Waechter: Spectrian has a head start in that we already have the needed talent and have established a solid infrastructure to build on. There is a limited amount of RF design capability, globally, and we have a stronghold of skilled design engineers. We also have gone to great lengths in order to protect our intellectual property. We have a large number of patents that we hold today on RF technology, and we continue to add to that patent portfolio on a regular basis. In addition, we have the foundation for quality control, information technology and manufacturing systems and procedures we have in place that are required to support the needs of the major OEMs. It takes a mature infrastructure and fluid process knowledge to succeed, and this is not easy or quick to develop, especially for a small start-up company.

TWST: What kind of goals have you set for the company for the next two or three years?

Mr. Waechter: The company goals incorporate: To gain profitable growth and increased market share; To diversify the customer base by supporting more OEMs and winning new customers in our existing markets; To continue to capture a major market share in the 3G MCPA market.

TWST: Is there likely to be any change in technology or approach that is going to shift away from what you are doing?

Mr. Waechter: We are driving some specific technology initiatives, including both semiconductor technology and linearization technology. We expect to make some revolutionary steps during the next two years which will dramatically improve our electrical performance and product cost.

TWST: What is the pricing environment like?

Mr. Waechter: Recently, we have been successful at increasing our market share in new technology areas, where price pressure is not an immediate issue. As these products mature, we expect pricing to erode over time. Price pressure has been intense for single carrier amplifier products for several years. The SCPA business is an aggressive situation where the average selling price is eroding somewhere between 10% to 20% annually. In general, we are looking at ways to reduce the cost of our products on a continual basis.

TWST: What risks should the investors be aware of?

Mr. Waechter: Some concerns for the industry, in general, would be a rapid and unexpected change in customer needs, sudden technology change, entry of new competitors into the market and the risk of shortages of components. Also, employee turnover is always a concern for us because our operations are based in the Silicon Valley.