Adaptec 2007 Annual Report Download - page 40

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Table of Contents
China as the technology gains acceptance in this market. In Korea, the government is expected to complete the regulatory policy for IPTV in 2008, and select
IPTV service providers which will result in resumption in EPON FTTH deployments in Korea in the second half of the year.
We are also offering customers a multi-service fiber access gateway solution with an integrated GPON interface. This product will enable carriers to expand high
definition video offerings to consumers through mass deployment of higher bandwidth application such as video picture sharing, peer-to-peer and data storage.
We are closely aligning with leading OEM customers who supply carriers who are investing in their networks to enable delivery of residential video services. We
are well positioned for these network upgrade opportunities with solutions that have high data throughput and require lower power for our customers. Our current
business strategy also includes broadening our semiconductor solutions into the WiMax market.
With regard to our communications business, we continue to see the convergence of networks and build-outs driving service provider requirements and large
contracts for metro-optical transport and access equipment. We are seeing growth in demand for our access products as service providers expand their wired and
wireless networks around the world.
We expect our our SOC solutions to continue to penetrate the laser printer market as well as the network-attached storage market for small to medium sized
businesses. We will also continue to pursue ASIC design wins with our leading OEM customers in this market.
On January 1, 2007, we adopted FIN48 resulting in a net decrease in a $4.7 million in our accumulated deficit, a decrease in our unrecognized tax benefit and a
$1.1 million increase to the deferred tax asset. See Note 14 for further information on Income Taxes. During the year, our liability for unrecognized tax benefits
increased significantly due to the accrual of additional taxes, related interest expense and foreign exchange revaluation related to this liability. See Note 14 to the
Consolidated Financial statements for further information about our FIN48 liability. The adoption of FIN48 will continue to have an adverse impact on our
results of operations in future periods.
In the fourth quarter of 2007, we announced that our Chief Executive Officer and President, Robert L. Bailey, will be retiring from the positions of President and
Chief Executive Officer once his successor has been appointed. Mr. Bailey has been nominated to be re-elected as the Chairman of the Board at the upcoming
2008 Annual Stockholder Meeting. The Search Committee of the Board of Directors is actively searching for a successor to Mr. Bailey.
In order to align our fiscal year end with the calendar year end, fiscal 2005 consisted of 53 weeks compared to 52 weeks in fiscal 2007 and fiscal 2006.
34
Source: PMC SIERRA INC, 10-K, February 22, 2008