Presentation by the management team of CML Microsystems – 21/07/2022

CML is a semiconductor company focused on the next generation of wireless communications technologies.  It has positions in analog and compound semiconductor products and technologies, and a blue-chip customer base. CML is well-placed to capitalise on the exciting opportunities presented by the next generation of wireless communications across 5G, the Industrial Internet of Things, satellite and voice communications.  Our valuation work suggests that the current market valuation is focused on the CML of old. Given the expected explosion in applications for next-generation wireless technologies and CML’s track record in niche and specialist applications, multiples may rise as evidence of traction builds.

Panelists: Executive Chairman, Nigel Clark and Group Managing Director, Chris Gurry

Watch the full presentation below or navigate to the segments and questions that interest you the most.

1. How exactly do you work with distributors and how has / is this changing?

2. How difficult is it to recruit skilled people to come and work for CML and where do you generally source your employees from?

3. You mentioned that the 5G opportunities are going to come a little further into the future. Is that because the 5G infrastructure is not yet fully developed, or is it because of slow product development?

4. Does 5G require shorter distances between the equipment and the infrastructure for it to be effective?

5. Who are your main competitors?

6. Historically it has taken 1-2 years to design a chip and get it into production for customers, and then another couple of years before customers get the chip to market in their products – is this changing?

7. What proportion of your staff are chip designers/engineers, sales, customer tech support etc. ?

8. You mentioned that your design work and testing is carried out in the UK but a large part of your manufacturing is done overseas. How do you maintain control over the manufacturing side of the business and ensure that your chips are not being copied?

9. How do you secure manufacturing capacity at the foundries if you're competing against larger companies?

10. What is your capacity in terms of scaling up?

11. Could the company comment on the identity and strength of the competition?

12. Can you talk about customer dependency and also describe how you first came to work with some of them?

13. There have been issues for CML and the semiconductor industry in general recently – can you say how this has affected CML and provide an update on the situation?

14. You stated that you currently have a record order book which to an extent is likely due to supply chain issues forcing customers to look further ahead and secure supply. How much visibility do you have, and can you properly gauge the strength of demand?

15. You said that you may make more acquisitions – can you give more detail about your recent acquisitions and explain why you bought those particular companies?

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