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Tektronix execs see phased recovery for test industry

Posted: 12 May 2003 ?? ?Print Version ?Bookmark and Share

Keywords:tektronix? test? measurement? test equipment? oscilloscope?

The test and measurement sector of the electronics industry will undergo a phased recovery that will depend on more than just an overall economic turnaround, according to executives at the annual Tektronix Analyst Day.

At least three other factors are at play, they said: the semiconductor market needs to grow at double-digit rates; wireless communications needs to expand; and new technology drivers need to kick in.

"Despite the downturn, there is an $8 billion [test and measurement] market that's holding its own, right now," said Rick Wills, chairman and CTO.

"Tektronix is bouncing along a rocky bottom," added Colin Slade, CTO. "We were able to stay profitable for the last eight quarters by reducing capital expenditure by more than $100 million and not affect R&D and our strategic resources."

Slade said Tektronix is in the midst of its deepest downturn ever and the company's predictive model suggests a phased recovery beginning within one year.

The company's strategy for surviving the downturn is to concentrate on $100-million to $150-million market segments and grow new markets, one at a time. "It does us no good to be number one in insignificant markets," said Wills, "thus we are capitalizing on our four leading markets - oscilloscopes, logic analyzers, video test, and mobile protocol test - and forging ahead into two new significant markets, signal sources and RF test."

The signal source market is to be built on the back of the October 2002 acquisition of Sony/Tektronix, now renamed Tektronix Japan. The venture has catapulted Tektronix into second place in signal-source market share and enhances its ability to address the Japanese market over the long term.

This could enable Tektronix to leverage engineering resources and to distribute globally products from Japan. The first product specifically produced at Tektronix Japan will be available soon, according to Craig Overhage, VP and general manager of the instruments business unit.

Tektronix expects the mobile protocol test market to be a growing business. While 3G cellular market is sustainable, the market will eventually hit a growth spurt, said David Churchill, VP of the communications business unit.

"It is not a question of if, but just how fast it will come. For Tektronix, the longer the rollout the more test equipment people are going to buy to get all the bugs out of the systems."

What's more, test equipment to check and monitor wireless communications devices and infrastructure is expected to be used in countries like China, Russia, and India where wireline communications is impractical.

To that end, Tektronix opened a second Chinese manufacturing facility in Shanghai in March, complementing its first fab opened in 1992. "Continued expansion in China allows us to support customers in this major market, which strengthens our overall objective of increasing market penetration," said Tektronix chairman Wills.

Manufacturing plans include production of Tektronix TDS1000 and TDS2000 digital storage oscilloscopes, which were designed specifically to be manufactured in China, the company said.

- Nicolas Mokhoff

EE Times

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