T.J. Rodgers, President and CEO of Cypress Semiconductor

This is a partial transcript from Your World with Neil Cavuto, April 17, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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BRENDA BUTTNER, GUEST HOST: SARS is creating a logistical nightmare for business executives who depend on traveling to Asia -- the fallout fast and furious for tech companies on the West Coast.

What’s the fallout for our next guest? Joining us now from San Jose, California is T.J. Rodgers, CEI of Cypress Semiconductor. T.J. are you there?


BUTTNER: Thank you for being there a little bit early, we appreciate it. Sometimes these satellites cause us technological problems which we know you know much about solving the problems of. How much has this been a problem for you as a tech CEO?

RODGERS: Well, first, I’d like to say that No Cyprus chips are in any technical problem associated with this program.

BUTTNER: Absolutely not. We know that.

RODGERS: SARS, we don’t think it is a big deal. There are no American deaths associated with SARS. We have taken precautions. We have a list of countries. And we’ve gone to critical travel only to those countries. We certainly don’t want to bring a case back into the company. But the fact is no Americans have ever died from SARS, 35,000 people die from the flu every year. And I don’t think it is something that we should overreact to.

BUTTNER: No. That is really true. And it was a point I was trying to make that it really has been a mass hysteria. And in fact there have been no deaths at least here in the United States. Do you think we are reacting in a hysterical fashion?

RODGERS: Well, there is not a lot of news these days now that the Iraq war is calming down. And this is something to talk about. And yes, I think that sometimes in filling space we talk about things that are less important when there aren’t more important things to talk about. Now it could be wrong, it’s a new kind of virus. It’s genetically never been found before. And it is more deadly than other forms of - like influenza. So you can’t say for sure it’s not going to be a problem. But I really think if you look at the chances of your getting sick or dying in the next month, there are probably 20 other things you would worry about first.

BUTTNER: Well, Asia is an important market to you. Is this affecting your business?

RODGERS: Not yet. We have people in Asia so we can ship and communicate with Asia. It is cutting back our travel to Asia, so we’ve canceled some trips to some of the countries, Hong Kong for example, where we might go on sales trips. But we are not really changing our business that much.

BUTTNER: Do you have factories over there?

RODGERS: We have a factory in Manila, and that is another issue for us, so travel between our home plant and our Philippines plant is less than it would be otherwise.

BUTTNER: I did want to talk to you about your business and congratulate you, actually, because you had a narrower than expected first quarter loss. And in fact you are expecting a profit this quarter, is that correct?

RODGERS: Yes. That’s true. It looks like the big recession of 2001 and 2002 is behind us. We lost a dime last quarter and we exceeded the Street on revenue this quarter. We’ve already told them we’re going to make money so you can know that we pretty well have that lined up. So we are looking as if we are past the recession right now.

BUTTNER: Now, look, of course you know that analysts always want you to look ahead, far ahead. What do you see in the next year?

RODGERS: I think the middle of the year could be unsettled. We have a semiconductor index that we watch very carefully. It’s a composite index that’s put out by a private research firm. And that index has gone negative. It has taken a hit from the Iraq war. We don’t think we see it in our business, but the fact is whenever you’re struggling just to recover, to have some index say the middle of the year might be a little shaky. So I am looking for mild improvement during the middle of this year and the takeoff at the end of the year, and a real strong 2004.

BUTTNER: Well, it’s often the semis that lead the market out of a dip. So we will be hoping that your outlook holds true for that as well. All right, thank you so much.

RODGERS: Thank you.

BUTTNER: T.J. Rodgers of Cyprus Semiconductor, we appreciate it.

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