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Avago takes semiconductor baton from Agilent

Posted: 03 Apr 2006 ?? ?Print Version ?Bookmark and Share

Keywords:vivek nanda? ee times asia? agilent? avago? hp?

Late last year, Agilent Technologies sold off its semiconductor business, leading to the establishment of Avago Technologies on December 1, 2005. EE Times-Asia Executive Editor Vivek Nanda recently met with a group of senior Avago executives in order to find out what they have planned for the new company. Present at the meeting were Dick Chang, president and CEO; Jeff Henderson, senior VP of worldwide sales and marketing; Bian Ee Dato Tan, president for Asia; and Low Peck Kem, VP of human resources, Asia-Pacific.

EE Times-Asia: You have purchased a wide range of technologies, product categories and target markets. Do you plan on re-focusing energies on any particular technology or product?
Dick Chang: When Agilent separated from HP in 1999, the company took all the semiconductor-related IP. So, we have all the HP and Agilent semiconductor-related IP, which amounts to about 2,000 patents!most of them very significant!and these represent all the work done at the HP and Agilent research laboratories. We have good technologies, and we intend to continue to build on them and apply them to markets of interest. We are now looking at creating brand-new products and growing in some new markets for us to assume the leadership position.

When Agilent sold its semiconductor business, it said the slump in that market made it focus on its core expertise in test equipment. You are sitting on a business which, for Agilent, did not make much. What do you intend to do differently?
Chang: Not much!we intend to focus on the same areas. A new company can realize significant cost savings by not being part of Agilent and not having to support the very complex Agilent infrastructure!which was necessary because it was in so many businesses. Semiconductor products are growing. We are a leader in many of the markets, and we are going to become even more profitable because of the cost savings in infrastructure as we move toward being a simpler pure-play semiconductor business.

How do you see the application segments for your business growing this year?
Chang: This year is shaping up to be pretty much what we expected. We are seeing good demand across all our businesses. The global economy is robust!it has not been 'hyper,' which is good!and demand from both consumers and end-suppliers is quite good.

How do you see the enterprise market shaping up?
Chang: Enterprise markets are rolling a little faster than they have done in the last three to five years. The enterprise space for network switching equipment and services is definitely not as crazy as before the bubble. Consumer electronics has taken over as the dominant sector. But the enterprise space does have its own dynamics. Scalewise, it's not as big as the consumer sector. I think it tends to get neglected because many enterprise players got badly hurt after the bubble burst.
We were diversified. In the bubble days, we were 60 percent communication, and 40 percent consumer and industrial. Today, we are about 60 percent consumer and industrial, and 40 percent enterprise. And of course, the consumer cellphone side is growing faster.

In terms of geographical markets, where are your energies focused?
Jeff Henderson: We are focused on Asia, which is where everybody has to be. We have more than 50 percent of our shipments going to Asia today. We are certain to see more design activity in the region as well. We are working with top-tier mobile-phone companies in Europe and in Korea, and with the next tier of handset companies, including those in Asia. As for the industrial segment, companies not only manufacture, but also design in Asia. Each of the products we provide has a presence in Asia.
China is already a large market. There was a 35 percent growth in semiconductor consumption last year. There is no faster growth anywhere in terms of this consumption. With the fact that standards are in place for 3G, we should obviously expect more semiconductor content. In fact, we have a solution that is a combination of power-amplifier and filtering technologies for mobile phones. And if we put these together in an integrated platform, it results in a very power-efficient solution. So if you put 3G in China, with all the potential subscribers there, we would love the opportunity.

How has the transition been from the Agilent Malaysia facility to Avago? What are some of the challenges you are facing?
Bian Ee Dato Tan: Earlier, there were 5,000 employees!3,000 with Avago and 2,000 with Agilent. So what we have done is basically increase the use of in-house resources so that we can focus on activities to empower business management. In Malaysia, we have focused on product engineering and new products. We have operations in China, the Philippines and other low-cost countries. We've outsourced some of these activities.
Low Peck Kem: When we moved from HP to Agilent, we had a 10-month transition period. From Agilent to Avago, we had four months. So first, we asked employees to leave HP and join Agilent!and now, to leave Agilent and join Avago. We not only made the transition on time, but we had a more than 99 percent sign-on rate.

The Agilent brand has been quite strong. What is your strategy for the Avago brand?
Henderson: We are very optimistic that the Avago brand in the semiconductor sector will become much stronger. Many people worldwide recognize the semiconductor products of HP. The Agilent Technologies brand is very strong in test equipment. It's actually not that strong in semiconductors.
I think the separation of Agilent from HP helped us in the sense that customers will remember that the transition caused no disruption of supplies. So when we informed them of the separation of semiconductor products from Agilent, they had great confidence in us. They believed that we could be a better semiconductor supplier because we are better focused, and we'll do a better job without the encumbrance of corporate policies and all those other things that came with being part of Agilent. We are very excited for the opportunity to pursue our own destiny. We're more focused and more efficient, and we've got more savings, so we can carefully decide on how to invest.

- Vivek Nanda
Electronic Engineering Times-Asia

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