Dr. Das: TranSwitch is in the business of supplying silicon solutions to the communications industry. We have customers in two segments of the communications industry. The first segment consists of companies such as Alcatel, Ericsson, Siemens, Lucent, Nortel, Tellabs and ECI ' each are telecom system vendors. The second segment consists of companies such as Ascend, which is now part of Lucent, Bay Networks, which is now part of Nortel, Cabletron, etc. These are more the traditional type telecom vendors. The first set of customers, namely Alcatel, Ericsson, Siemens, Tellabs and Nortel, use our products in the public network infrastructure. The second set of customers use our products in the Internet infrastructure, as well as incorporating our product into wide area networks or Fortune 2000 companies. Today, most of our revenue comes from the public network infrastructure vendors. Historically, we have been growing at a very good rate; from quarter three we grew by 25% over quarter two. It was the same situation with quarter two over quarter one. Our overriding margin in quarter three has been 40%, and our gross margin has been 70.6 and we have close to $600 million in cash. In September, we had a very successful convertible debt offering for $460 million. We had more than $130 million, before debt, in the bank, and this quarter we also added $17 million of additional cash. If we add up all of those numbers, we have close to $600 million in the bank. So we are financially very strong.
TWST: What's the outlook for demand in the public sector segment, which
is your biggest segment, of the business?
Dr. Das: We don't see any slow down in demand. There were some concerns
that we saw published in recent articles and discussions in the Internet
chat rooms about Lucent's softness. Even with Lucent, our revenue went
up in Q3 sequentially, so we don't see any slowdown. We supply enabling
technology for transmission infrastructure, and whether it is in North
America, Europe, Israel, or the rest of the world, the activity level
for our products and the momentum is at an all time high.
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