CY » Topics » Research and Development

These excerpts taken from the CY 10-K filed Feb 26, 2009.

Research and Development

Research and development expenses are focused on the development and design of new semiconductor products, as well as the continued development of advanced software platforms primarily for our programmable solutions. Our goal is to increase efficiency in order to maintain our competitive advantage. Our research and development organization works closely with our manufacturing facilities, suppliers and customers to improve our semiconductor designs and lower manufacturing costs. During fiscal 2008, 2007 and 2006, research and development expenses totaled $193.5 million, $174.2 million and $232.6 million, respectively.

We have both central and division-specific design groups that focus on new product creation and improvement of design methodologies. These groups conduct ongoing efforts to reduce design cycle time and increase first pass yield through structured re-use of intellectual property blocks from a controlled intellectual property library, development of computer-aided design tools and improved design business processes. Design and related software development work primarily occurs at design centers located in the United States, Europe, India and China.

 

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Research and Development

Research and development expenses are focused on the development and design of new semiconductor products, as well as the continued development of advanced software platforms primarily for our programmable solutions. Our goal is to increase efficiency in order to maintain our competitive advantage. Our research and development organization works closely with our manufacturing facilities, suppliers and customers to improve our semiconductor designs and lower manufacturing costs. During fiscal 2008, 2007 and 2006, research and development expenses totaled $193.5 million, $174.2 million and $232.6 million, respectively.

We have both central and division-specific design groups that focus on new product creation and improvement of design methodologies. These groups conduct ongoing efforts to reduce design cycle time and increase first pass yield through structured re-use of intellectual property blocks from a controlled intellectual property library, development of computer-aided design tools and improved design business processes. Design and related software development work primarily occurs at design centers located in the United States, Europe, India and China.

 

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Research and Development (“R&D”)

 

     Year Ended  
     December 28,
2008
    December 30,
2007
    December 31,
2006
 
     (In thousands)  

R&D expenses

   $ 193,522     $ 174,240     $ 232,608  

As a percentage of revenues

     25.3 %     21.2 %     27.2 %

R&D expenses increased $19.3 million in fiscal 2008 compared to fiscal 2007. The increase was primarily due to an increase of $23.2 million in stock-based compensation expense mainly due to the modification of the outstanding employee equity awards approved by the Board in connection with the Spin-Off. This increase was partially offset by the favorable impact of $4.3 million related to amounts recorded under our employee deferred compensation plan.

R&D expenses decreased $58.4 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenses was primarily driven by the reduction of employee-related costs of $20.8 million and other cost savings of $28.0 million. These cost reductions were mainly attributable to the divestitures of non-strategic product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development.

 

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Research and Development (“R&D”)

 

     Year Ended  
     December 28,
2008
    December 30,
2007
    December 31,
2006
 
     (In thousands)  

R&D expenses

   $ 193,522     $ 174,240     $ 232,608  

As a percentage of revenues

     25.3 %     21.2 %     27.2 %

R&D expenses increased $19.3 million in fiscal 2008 compared to fiscal 2007. The increase was primarily due to an increase of $23.2 million in stock-based compensation expense mainly due to the modification of the outstanding employee equity awards approved by the Board in connection with the Spin-Off. This increase was partially offset by the favorable impact of $4.3 million related to amounts recorded under our employee deferred compensation plan.

R&D expenses decreased $58.4 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenses was primarily driven by the reduction of employee-related costs of $20.8 million and other cost savings of $28.0 million. These cost reductions were mainly attributable to the divestitures of non-strategic product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development.

 

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Research and Development
(“R&D”)

 



































































   Year Ended 
   December 28,
2008
  December 30,
2007
  December 31,
2006
 
   (In thousands) 

R&D expenses

  $193,522  $174,240  $232,608 

As a percentage of revenues

   25.3%  21.2%  27.2%

R&D expenses increased $19.3 million in fiscal 2008 compared to fiscal 2007. The increase was
primarily due to an increase of $23.2 million in stock-based compensation expense mainly due to the modification of the outstanding employee equity awards approved by the Board in connection with the Spin-Off. This increase was partially offset by
the favorable impact of $4.3 million related to amounts recorded under our employee deferred compensation plan.

R&D expenses decreased
$58.4 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenses was primarily driven by the reduction of employee-related costs of $20.8 million and other cost savings of $28.0 million. These cost reductions
were mainly attributable to the divestitures of non-strategic product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development.

 


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Research and Development
(“R&D”)

 



































































   Year Ended 
   December 28,
2008
  December 30,
2007
  December 31,
2006
 
   (In thousands) 

R&D expenses

  $193,522  $174,240  $232,608 

As a percentage of revenues

   25.3%  21.2%  27.2%

R&D expenses increased $19.3 million in fiscal 2008 compared to fiscal 2007. The increase was
primarily due to an increase of $23.2 million in stock-based compensation expense mainly due to the modification of the outstanding employee equity awards approved by the Board in connection with the Spin-Off. This increase was partially offset by
the favorable impact of $4.3 million related to amounts recorded under our employee deferred compensation plan.

R&D expenses decreased
$58.4 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenses was primarily driven by the reduction of employee-related costs of $20.8 million and other cost savings of $28.0 million. These cost reductions
were mainly attributable to the divestitures of non-strategic product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development.

 


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These excerpts taken from the CY 10-K filed Mar 3, 2008.

Research and Development ("R&D")

 
  Year Ended
 
 
  December 30,
2007

  December 31,
2006

  January 1,
2006

 
 
  (In thousands)

 
R&D expenses   $ 187,803   $ 242,292   $ 225,944  
As a percentage of revenues     11.8 %   22.2 %   25.5 %

        R&D expenditures decreased $54.5 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenditures was primarily driven by the reduction of employee-related costs of approximately $20.8 million and other cost savings of approximately $28.0 million. These cost reductions were mainly attributable to the divestitures of non-strategic product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development as we reduced our efforts in this area. The reduction in R&D expenditures was partially offset by an increase of approximately $3.9 million incurred by SunPower primarily due to an increased headcount and the development of next generation solar cells and new processes for solar panel assembly operations. As a percentage of revenues, R&D expenditures decreased significantly in fiscal 2007 compared to fiscal 2006 primarily due to the decrease in consolidated R&D expenditures coupled with the significant increase in SunPower's revenues. We anticipate that R&D expenditures in absolute dollars will remain relatively flat in fiscal 2008 compared to fiscal 2007.

        R&D expenditures increased $16.3 million in fiscal 2006 compared to fiscal 2005. The increase was primarily attributable to stock-based compensation expense of $17.9 million as we implemented SFAS No. 123(R) in fiscal 2006 and an increase of $9.4 million in other employee-related compensation expense primarily due to increases in payments under the employee bonus plans and salary increases. The increase in R&D expenditures was partially offset by a decrease of approximately $7.8 million in repair and maintenance related expenses and approximately $3.5 million in depreciation.

Research and Development ("R&D")





















































 
 Year Ended
 
 
 December 30,

2007

 December 31,

2006

 January 1,

2006

 
 
 (In thousands)

 
R&D expenses $187,803 $242,292 $225,944 
As a percentage of revenues  11.8% 22.2% 25.5%




        R&D
expenditures decreased $54.5 million in fiscal 2007 compared to fiscal 2006. The decrease in R&D expenditures was primarily driven by the reduction of employee-related costs
of approximately $20.8 million and other cost savings of approximately $28.0 million. These cost reductions were mainly attributable to the divestitures of non-strategic
product lines and businesses which resulted in reduced R&D activities in fiscal 2007, coupled with the termination of certain employees related to process technology development as we reduced our
efforts in this area. The reduction in R&D expenditures was partially offset by an increase of approximately $3.9 million incurred by SunPower primarily due to an increased headcount and the
development of next generation solar cells and new processes for solar panel assembly operations. As a percentage of revenues, R&D expenditures decreased significantly in fiscal 2007 compared to
fiscal 2006 primarily due to the decrease in consolidated R&D expenditures coupled with the significant increase in SunPower's revenues. We anticipate that R&D expenditures in absolute dollars will
remain relatively flat in fiscal 2008 compared to fiscal 2007.



        R&D
expenditures increased $16.3 million in fiscal 2006 compared to fiscal 2005. The increase was primarily attributable to stock-based compensation expense of
$17.9 million as we implemented SFAS No. 123(R) in fiscal 2006 and an increase of $9.4 million in other employee-related compensation expense primarily due to increases in
payments under the employee bonus plans and salary increases. The increase in R&D expenditures was partially offset by a decrease of approximately $7.8 million in repair and maintenance related
expenses and approximately $3.5 million in depreciation.



This excerpt taken from the CY 10-K filed Mar 1, 2007.

Research and Development (“R&D”)

 

    Year Ended
   

December 31,

          2006          

 

January 1,

          2006          

 

January 2,

          2005          

    (In thousands)

R&D

  $     244,104      $     226,760      $     261,629   

As a percentage of revenues

    22.4%     25.6%     27.6%

R&D expenditures increased $17.3 million in fiscal 2006 compared with fiscal 2005. The increase was primarily attributable to stock-based compensation expense of $17.9 million as we implemented SFAS No. 123(R) in fiscal 2006 and an increase of $9.4 million in other employee-related compensation expense primarily due to increases in amounts recorded under the employee bonus plans and salary increases. The

 

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increase in R&D expenditures was partially offset by a decrease of approximately $7.8 million in repair and maintenance related expenses and approximately $3.5 million in depreciation.

R&D expenditures decreased $34.9 million in fiscal 2005 compared with fiscal 2004. The decrease was primarily due to a decrease of approximately $13.9 million in employee-related compensation expenses and $9.0 million in depreciation. The decrease in employee-related compensation expenses was primarily attributable to the termination of employees under the restructuring measures implemented in fiscal 2005, coupled with a decrease in stock-based compensation charges primarily as a result of terminated employees and a decrease in acquisition-related contingent compensation charges. The decrease in depreciation was primarily attributable to the removal of excess property and equipment under the restructuring measures, coupled with the savings resulted from the changes in the useful lives of certain equipment and production assets during fiscal 2005. In addition, R&D expenditures decreased by $7.0 million for SunPower primarily due to the completion of certain R&D efforts related to SunPower’s solar cell products and production line in the Philippines in late fiscal 2004.

This excerpt taken from the CY 10-K filed Mar 17, 2006.

Research and Development

 

     Year Ended  
    

January 1,

2006

   

January 2,

2005

   

December 28,

2003

 
     (In thousands)  

Research and development

   $ 226,760     $ 261,629     $ 251,432  

As a percentage of revenues

     25.6 %     27.6 %     30.0 %

Research and development (“R&D”) expenditures decreased $34.9 million in fiscal 2005 compared with fiscal 2004. The decrease was primarily due to a decrease of approximately $13.9 million in employee-related compensation expenses and $9.0 million in depreciation. The decrease in employee-related compensation expenses was primarily attributable to the termination of employees under the restructuring measures implemented in fiscal 2005, coupled with a decrease in stock-based compensation charges primarily as a result of the release of the unamortized deferred compensation balance associated with the terminated employees and a decrease in acquisition-related contingent compensation charges. The decrease in depreciation was primarily attributable to the removal of excess property and equipment under the restructuring measures, coupled with the savings resulted from the changes in the useful lives of certain equipment and production assets during fiscal 2005. In addition, R&D expenditures decreased by $7.0 million for SunPower primarily due to the completion of certain R&D efforts related to SunPower’s solar cell products and production line in the Philippines in late fiscal 2004.

R&D expenditures increased $10.2 million in fiscal 2004 compared with fiscal 2003. The increase was primarily due to a $3.9 million increase in salaries and other compensation due to a moderate pay increase, and a $3.7 million increase in expenses related to SunPower consisting primarily of process development spending associated with the commercialization of its solar cell products and the start-up costs related to its production line.

This excerpt taken from the CY 10-Q filed Nov 14, 2005.

Research and Development

 

     Three Months Ended

    Nine Months Ended

 

(In thousands)


  

October 2,

2005


   

September 26,

2004


   

October 2,

2005


   

September 26,

2004


 

Research and development

   $ 56,068     $ 64,764     $ 171,151     $ 194,719  

As a percentage of total revenues

     24.7 %     29.5 %     26.4 %     26.4 %

 

For the three months ended October 2, 2005, research and development (“R&D”) expenses decreased $8.7 million compared to the same prior-year period. The decrease in R&D expenditures was due to a decrease of approximately $4.7 million in employee-related compensation expenses and depreciation, which was primarily attributable to the restructuring measures implemented during the first quarter of fiscal 2005. In addition, R&D expenditures decreased approximately $4.3 million for SunPower primarily due to the completion of certain R&D efforts related to a product line in the fourth quarter of fiscal 2004. The decrease in R&D expenditures was partially offset by an increase of approximately $1.6 million in purchases of R&D-related supplies.

 

For the nine months ended October 2, 2005, R&D expenses decreased $23.6 million compared to the same prior-year period. The decrease in R&D expenditures was due to a decrease of approximately $18.3 million in employee-related compensation expenses and depreciation, which was primarily attributable to the restructuring measures implemented during the first quarter of fiscal 2005. The decrease in employee-related compensation expenses included a credit of approximately $1.9 million as a result of the reversal of the unamortized deferred compensation balance associated with terminated employees. In addition, R&D expenditures decreased approximately $10.3 million for SunPower primarily due to the completion of certain R&D efforts related to a product line in the fourth quarter of fiscal 2004. The decrease in R&D expenditures was partially offset by an increase of approximately $7.4 million in purchases of R&D-related supplies.

 

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