DragonWave Inc DRWIQ

RE: demand

[itsnotme1]

Found this in Q2 MD & A

In the second quarter of fiscal 2010, we began to migrate elements of our

outsourced manufacturing that were previously conducted in North America to the Malaysian site of one

of our existing contract manufacturers. This move is resulting in lower per part costs, and has enabled us to

quickly meet the dramatic demand increase in the quarter. It has also broadened our supply chain so that

we are now using three rather than two contract manufacturing locations to source our manufactured

product. The increase in sales demand has resulted in a purchasing level where volume discounts are more

significant and the fixed costs of operations can be more effectively leveraged. We will continue to focus on

finding the highest quality and lowest cost manufacturing sources of supply, while concentrating internally

on cost constraint to maximize our gross margin results. Our design team are continuing to focus on

developing products and modifying existing designs to minimize manufacturing costs.