Interview with Sapphire CEO K D Au

The present - strengths & weaknesses

Sapphire CEO - K D Au

HEXUS: Hi, KD, thanks for taking the time to talk to us about life, the world, and everything.
KD: [smiles] A pleasure.

HEXUS:Let’s start at the present day, how is business?
KD: Well, it has been tough for the last year, with the supply levels being low, and it has been very difficult to meet the demands of customers. Our marketing guys have done well to drive the brand but without the supply of high-end parts it's hard to make sure that we can follow through with the goods.

HEXUS: How come it has been tough?
KD: We all know that ATI has struggled recently in certain parts of the market. But I believe changes at ATI will make things better. ATI put a lot of work into development for the XBox 360. This may have been a good project to undertake in the long-term, but it has hurt it in other areas, due to the fact they've had to redistribute resources.

HEXUS: It is public knowledge about your relationship with KY (ex-CEO of ATI), how has the relationship with ATI changed now he has left the company?
KD: To be fair, nothing has changed in the past two or three years with our relationship - KY had taken a strong back seat and Orton seems to have made some great changes and made the company focused for the better.

HEXUS:Who do you think is ahead? NVIDIA or ATI?
KD: They are leading in different areas, ATI, of course, was first to invest in the set-top box (DTP) but, of course, performance-wise it moves between both parties.

HEXUS: Let’s take a moment to talk about Sapphire: what are the success stories?
KD: Well, we are aiming to focus on selling a brand, we want to have multiple products and make sure that the relationships and channels we have set up get used in different product SKUs.

HEXUS: But you are ATI's biggest AIB partner, how will you grow or even retain this massive market share?
KD: We are not concerned about the AIB market, we have good products and a strong brand and we have great relationships with customers, distributors and press. However,we can't rely on ATI alone to grow the company in the long run - we need to be selective about what SKUs and products we take on and make sure that we target them to the right audiences.

HEXUS: What about the world market, which regions are you strong in?
KD: We are very strong in North America, Canada, UK, Germany and the Nordics but we are weak in other areas, such as Asia, and this is a great area to target for growth. We are also weak in Turkey and that’s another market I want to make sure we go with.

HEXUS:What’s your biggest weaknesses as a company?
KD: Single-source suppliers; it is bad for any business to be dependant on a single supplier. Take our business, our primary business is producing and selling discrete graphics boards based on ATI GPUs. If the market trends aren't in ATI's favour and NVIDIA is ahead then this, obviously, can hurt us. Also, if ATI can't deliver in volume this hurts us, too. The best thing which we can do is make sure we aren't dependant on a single supplier or SKU.

HEXUS: So you mean you might go "green"?
KD: I am not saying that directly but a lot of our customers, OEMs and retailers, have asked for both NVIDIA and ATI SKUs. Think of it like this, there are two types of people who will want a German car, some go for BMW, some go for Mercedes - the best thing to do is make sure both are covered. When the time is right, we may do it.

HEXUS: Oh, right, which OEMs do you currently work with?
KD: The bigger ones are Fujitsu Siemens, Medion and NEC. They will come to us and state they want XYZ and we have to deliver that or lose the business. Of course this is one of the main things which we have aimed to achieve with Sapphire, and that’s to build the brand rather than just being another "ATI" partner.