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Philips Semiconductors looking for a renaissance

Posted: 15 May 2002 ?? ?Print Version ?Bookmark and Share

Keywords:cellphone design? discrete ic? analog chips? china ic market?

Once seen as part of Europe's techno-market backwaters, Philips Semiconductors is finding a new pitch for its key strengths in areas like discrete ICs, while racing to launch silicon platform for cellphone design. And the mainland China market is at the forefront of its renewed fervor.

Ruud van der Linden, senior vice president and general manager, Asia Pacific region, says though Philips Semiconductors has been quite stable on its current number six position for many years, in some cases, the company was too late in the market. "But now, when the focus areasboth on customers and new technologieshave been directed, we are catching up fast," he said.

Alistair Banham, vice president of global sales and marketing at Philips Semiconductors, acknowledges that the company has not promoted its extensive portfolio of discrete and multi-market IC products as well as it should have done. That might change in the coming months as the industry will see more activities at the Dutch semiconductor company aligned to the new focus areas.

Philips Semiconductors, for instance, has established a standard product business unit that includes signal discretes, power discretes, standard logic, standard analog and microcontrollers. "We are number two in discrete ICs," says Banham, "and our competitors in this space are the likes of Fairchild Semiconductor, Infineon and STMicroelectronics."

Banham said that every market uses standard components. "Whether you are in consumer electronics or automotive or PC, standard components surround the core technologies in these applications," he added. "So we can serve as the interface between the real world, which is analog or linear world, and the digital core."

China, the centerstage

Although Philips Semiconductors is following product-driven strategy as opposed to a segment-driven strategy, there are certain areas where the company is prioritizing its focus: displays, digital consumer and wireless. And that focus is more evident in Asia, where Philips earned about 40 percent of last year's revenues.

Linden said Philips is investing in the high-end manufacturing in countries such as Malaysia, Philippines, Taiwan and Thailand. The company has established R&D facilities in Beijing and Shanghai to promote emerging communications technologies such as 3G and wireless LANs, while it has set up a software development center in Bangalore, India.

The mainland China market lies at the heart of Philips' business strategy in Asia. "We are very close to becoming number two in China's semiconductor business," Linden said.

Philips Semiconductors has three test & assembly plants in China, apart from a Shanghai- based joint-venture foundry with the Chinese government. The Dutch chipmaker is also working with a Taiwan company to supply complete chipset solutions for that company, which they can sell as a local brand.

Philips' recent foray into the design-win battle for the cellphone market--where Asia (more specifically China) would be the centerstageis nothing short of a coup for an industry already crowded with tech stalwarts such as Ericsson, Intel, Motorola and Texas Instruments. But Philips thinks its technically sound GSM capability would help it catch up with the market leader, TI.

"We are the only company who can provide everything in a cellphone: the hardware and software modules, the whole semiconductor content," Linden said. With the acquisition of VLSI, where Philips acquired knowledge in baseband area, a unique competitive advantage, Linden says that the Dutch chipmaker can provide a complete system solution for mobile phones that are still not easy to develop.

Although Motorola is equipped with a strong portfolio, it also profiles itself strongly on handset OEM business, while Philips is playing in a different league here, Linden points out. He admits though that TI is the strongest competitor, but reckons that the rest of the list is a short one.

? Majeed A. Kamran

Electronic Engineering Times ? Asia

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