The PLD Market

The semiconductor industry is recovering from a three-year slowdown. In addition, the aggressive price reductions that characterized the PLD industry last year have stabilized.

Inventories at Xilinx, our distributors and our customers have decreased significantly, indicating that customers are ordering for immediate delivery. At the same time, the rapid global expansion of the Internet and the digitization of the electronics industry are creating greater demand for our chips. Sales of Xilinx chips to networking companies have more than doubled over the same period last year, as our devices are increasingly used in the equipment that is building the global communications infrastructure. New products manufactured on advanced technologies (0.35-micron and below), now constitute 35% of our total revenues, up from 12% a year ago. Design-win activity for these products continues to be strong, and their growth in sales is more than offsetting the unavoidable decline in sales of our oldest product families.