Bob Bailey, PMC-Sierra, 2004 revenues: $375 million, Rank: 62 in TOP 100.

WHAT WENT WELL IN 2004? We went through a very difficult period from 2001 to 2003 during the telecom meltdown – we lost US$159 million. Last year we broke into the profitable region. 2004 was the first full year we’ve had a profit since 2000. We reduced our cost structure and increased revenues by 19 per cent. That’s the first thing that went well. We also made major inroads in new markets we’ve been working on, such as Asia, where our presence has grown significantly, especially in China and Japan. We’ve done new products in third-generation wireless, advanced optical and voice-over Internet protocol (VOIP), a real high-growth area. HOW IS 2005 SHAPING UP? Now that the rough patch is over, good. Now that the search for profitability is over, the goal is growth. CAN YOU BE MORE SPECIFIC? High-definition TVs, digital camcorders, video games, and MP3 players – all of those consumer areas are showing growth. We’re not in those products but do provide the infrastructure in communication technologies that enable them to be networked. There would be no market for most of these products without broadband and the Internet, and that’s where we come in. WHAT’S HAPPENING IN VoIP GOING FORWARD? As the evolution continues to an Internet protocol-centred network – taking the data and transporting voice traffic over the Internet – there is a plethora of products being developed to take advantage of this wave. For example, IP phones – phones that will switch from being a cell phone when you walk in the door to being connected to a local area network. Also, there’s VOIP gateways where you get both data and voice over the Internet, and in future you will get video services that way, with IPTVs. This will happen in Asia first. We have the chips and software that make all of this work. WHAT DOES THE FUTURE LOOK LIKE FOR PMC? The last downswing was a classic bubble, the worst in history. Mini-dips are inventory cycles where people build up too many chips and stop ordering for a few months, those you can weather. The bubble bursting is a complete destruction of a business model. PMC had what I describe as a near-death experience. We had to work fast. Asia helped and entering the VOIP market helped. WHAT DIDN’T GO WELL IN 2004? The second half of the year we saw an inventory correction, and sales were lower than in the first half. SURPRISES? Nothing surprises me in this business anymore. BIGGEST LESSON LEARNED? I believe things are going to become more competitive in the industry with the growth in Asia in high tech, but I believe the opportunities are going to be far better, too. HOW WILL PMC CASH IN? We’re in acquisition mode, but we’re very picky. We’re kicking a lot of tires. WHAT ARE YOU LOOKING FOR? New technologies and skills, but I don’t want to tip off the competition. RELATED STORIES Top 100 Overview 2005 Don Lindsay, Teck Cominco Bruce Aitki, Methanex Russ Horner, Norske Canada