Design expertise, manufacturing muscle and superior customer service mean nothing without the ability to make the sale. Our goal is to continue to capture more silicon real estate in every one of our customers’ circuit boards.
      Fairchild’s advantage goes beyond our diverse portfolio of high-performance products. Our multi-market focus and reputation for innovation, reliability, performance and delivery has allowed us to continue to win market share from our competitors whose strategic focus is on other product areas.
     1999 was a banner year for the expansion of Fairchild’s markets. The acquisition of the Power Device business (PD) from Samsung boosted Fairchild’s presence in Korea and the Asia Pacific region while opening doors in Europe and America for PD products. The purchase also reinforced Fairchild’s presence in the consumer and industrial market segments while supporting our traditionally strong presence in the computer and communications markets. The potential for cross-selling Fairchild’s total product portfolio is enormous and we are just starting to realize the benefits. Prior to the acquisition, 57 percent of Fairchild’s products were sold in the American and European markets, while less than 15 percent of PD sales were in those regions. In the first two quarters after the acquisition, PD sales in the American and European markets were up 30 percent, while “non-PD” product sales in Korea grew over 20 percent. As we move through 2000 and beyond with expanded manufacturing capacity, we expect to continue to realize market share gains from this synergistic acquisition.
      We continue to expand our web-based design tools, electronic product catalogs and our internal website to help the sales and field applications teams share expertise globally as they work face-to-face with customers to find Fairchild solutions to existing and new applications.
      A worldwide direct sales team and a growing force of field applications engineers working directly with customers to design-in Fairchild products have driven Fairchild’s new products sales growth from five percent of revenue in 1997 to more than 28 percent of revenue in the fourth quarter of 1999. This remarkable growth is a reflection of not only our increased R&D spending, but of the multitude of successful customer relationships we have developed—an initiative that allows Fairchild access to the customer design process early in the planning stages. As we grow the percentage of new product sales toward our target of 40 percent of total sales, we expect that our customer relationships, market share, and gross margins will all continue to grow.