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Macom's Croteau: Company Benefits From Expanding Cloud (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven blio to Washington,
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  Speaker 1: got gone. This is taking stock. Coming up on taking stock,
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  Speaker 1: We're going to take stock of make Calm Technology Solutions.
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  Speaker 1: They're based in Lowell, mass and the shares are of
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  Speaker 1: about three three and a half percent so far this year.
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  Speaker 1: as microwave, millimeter and wave applications, all the things that
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  Speaker 1: serve many of the technology comes to customers throughout the
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  Speaker 1: to Charlie Pellett in the Bloomberg news room for Bloomberg
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  Speaker 1: Alexander pleaded guilty to one count of securities fraud and
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  Speaker 1: down eleven and drop a point five percent. Gold down
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  Speaker 1: Thank you, Charlie from the Bloomberg Newsroom. I'm Jill Schneider.
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  Speaker 1: we thank you, and again recapping the dal the SMP
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  Speaker 1: NEZTAC are all declining twenty six minutes to go ahead
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  Speaker 1: of the clothes on a Wednesday, SMP five hundred index
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  Speaker 1: falling eleven points now to one, a drop of five
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  Speaker 1: tenths of one percent. I'm Charlie Pelton. That's a Bloomberg
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  Speaker 1: Business Flash. This is taking stock with Kathleen Hayes and
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  Speaker 1: Pim Fox on Bloomberg Radio. May come partners from radio
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  Speaker 1: Frequencies to light. Here to tell us more about it
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  Speaker 1: is John Krato. He is the chief executive of may Com.
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  Speaker 1: Their symbol on the NASDAC is M T s I
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  Speaker 1: and he can tell us all about five G. John,
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  Speaker 1: thanks very much for being with us. Oh, you're welcome.
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  Speaker 1: Before we get into the world of five G, can
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  Speaker 1: you just help me understand that a little bit about
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  Speaker 1: the history of may coom Technology Solutions, because were you
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  Speaker 1: at one point, uh, I guess you were supplying products
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  Speaker 1: to the U. S. Army. Yeah. Actually, the company's roots
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  Speaker 1: date back to just after the Second World War. UM
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  Speaker 1: was actually founded with the folks out of M I
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  Speaker 1: T doing the very first microwave components for the very
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  Speaker 1: first radar systems. So it's been it's been a long road,
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  Speaker 1: close to seven decades and you're based in Lower mass
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  Speaker 1: Now tell us about the five G. What exactly is
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  Speaker 1: five G? Well, five g's the next UH warriorless radio standard. UH.
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  Speaker 1: It's higher frequencies for higher data rates, broader coverage, more
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  Speaker 1: more dense coverage of for cell phones and smartphones and
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  Speaker 1: data services. And john I, so I started covering text
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  Speaker 1: three years ago and five G was being talked about
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  Speaker 1: then and now we're still kind of waiting. I guess
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  Speaker 1: at what point does this become a reality? Well, it
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  Speaker 1: depends on what flavor of five G you're talking about.
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  Speaker 1: It's you know, it is a whole collection of technologies
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  Speaker 1: that are that comprise five G. So there are versions
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  Speaker 1: which I would describe more like four and a half
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  Speaker 1: G that are within the next few years, and then
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  Speaker 1: depending on how extensive you think about it, it would
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  Speaker 1: be as much as five years. And Johnny, what would
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  Speaker 1: the role of make com teleco technology play in the
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  Speaker 1: introduction of five G technology? So when you're talking about
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  Speaker 1: the frequency bands for five g you're getting up to
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  Speaker 1: what's called millimeter wave, which are several gigga hurts and
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  Speaker 1: frequencies so well on radio frequency waves. And we've been
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  Speaker 1: a leader in that very very high end performance of
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  Speaker 1: wireless technology and optical technologies, UH for decades. So it's
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  Speaker 1: really playing into our willhouse. So when I when I
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  Speaker 1: look about and think about the semiconductor industry, UH, there's
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  Speaker 1: a lot of M and A. It has been kind
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  Speaker 1: of the key vein throughout these past for years. And
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  Speaker 1: since you all went public back in in what it
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  Speaker 1: seems like you've also acquired five companies. I guess, how
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  Speaker 1: does that fit into may com strategy in terms of
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  Speaker 1: buying rather than than building. I would say the impetus
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  Speaker 1: behind the M and A. The last year's unquestionably been
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  Speaker 1: a year of consolidation for the broader seming conductor industry.
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  Speaker 1: We really operate within a more esoteric niche at the
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  Speaker 1: very very high end of the performance spectrum. A lot
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  Speaker 1: of the other consolidation is really consolidation of underperformers. UH.
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  Speaker 1: There are a lot of companies that have failed to grow,
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  Speaker 1: failed to return on an estments in research and development,
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  Speaker 1: and that's what that's all about, delivering shareholder value in
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  Speaker 1: the form of consolidation. Our M and A strategy is different.
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  Speaker 1: We have built a portfolio through kind of inorganic assembly
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  Speaker 1: of technologies, really targeting secular growth drivers in the industry.
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  Speaker 1: Can you give us an example of some of your
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  Speaker 1: customers and the products that you sell to them. Sure,
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  Speaker 1: our biggest, our hottest part of the portfolio right now
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  Speaker 1: is our optical business that's really being fueled by what
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  Speaker 1: is essentially an insatiable demand in bandwidth. You know, there's
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  Speaker 1: a cloud connected apps economy that we live in is
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  Speaker 1: really driving a need of a whole new build out
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  Speaker 1: of the long haul networks, metropolitan networks, data center, interconnects,
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  Speaker 1: data centers, there's the whole Internet backbone as being rebuilt,
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  Speaker 1: largely with technologies that we provide. As I was just
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  Speaker 1: gonna say, as part as that that build out, I mean,
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  Speaker 1: are you finding that the expansion of these networks are
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  Speaker 1: they being delayed because I note, for example, that some
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  Speaker 1: of the efforts by Google in several of their markets
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  Speaker 1: to roll out high speed fiber have run into some roadblocks. Sure,
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  Speaker 1: in the US, you know, there's been some delays there's
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  Speaker 1: fits and starts, but I would say globally it's exploding.
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  Speaker 1: Uh not the least of which is China. We have
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  Speaker 1: a very strong position. A lot of our sales are
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  Speaker 1: going into the rebuild out of the China Internet infrastructure,
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  Speaker 1: everything from fiber to the home, uh the equivalent of
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  Speaker 1: FiOS in the US through the long home networks metro networks.
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  Speaker 1: As I mentioned, China is interesting because they tend to
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  Speaker 1: prefer homegrown businesses for their technology back end providers. How
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  Speaker 1: did you get into that market? Yeah? You know, there's
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  Speaker 1: no question any any clime would point out any country,
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  Speaker 1: any any company prefers homegrown, local technologies. We tend to
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  Speaker 1: specialize in technology spaces that are so advanced and such
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  Speaker 1: leading edge that uh, they tend not to play to
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  Speaker 1: the merits of a cost based economy. UH. So it's
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  Speaker 1: it's very much all about innovation and what we do
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  Speaker 1: in the in the absolute leading edge technologies where we
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  Speaker 1: really don't have much Asian competition. So, you know, the
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  Speaker 1: guys building out that network in China, Blake Luwawe or
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  Speaker 1: z t E uh come to us. You know, we're
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  Speaker 1: the foremost provider of many of these technologies. Globally, so
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  Speaker 1: a bet on the expansion of cloud is a bet
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  Speaker 1: on Maycom. Thank you, President and CEO of Maycom, John
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  Speaker 1: Krowtao for joining us today talking about the semiconductor industry.
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  Speaker 1: I am Alex Brinka in for Kathleen Hayes here with
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  Speaker 1: him Fox. You are listening to Bloomberg Radio. Coming up,
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