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MCU, Asia spell the difference for Atmel

Posted: 01 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Interview? Yang Chiah Yee? MCU market? capacitive sensing IP? user interface?

Yee: Our core strategy is moving from a company not only selling MCUs, but a company selling MCU system solutions.

The slowdown in the U.S. economy has affected industry players, big and small alike. In order to weather tough days ahead, a solid strategy is absolutely necessary, and it must have very clear short- and long-term goals.

Atmel Corp. is ready to battle the doldrums. In these difficult times, the company posted $420.9 million in revenue for Q2 08, a 2.4 percent increase over $411.2 million for the previous quarter, and a 4.1 percent increase over the same quarter last year. MCUs continued to deliver solid revenue growth rising 9 percent sequentially and 29 percent compared with the year-ago quarter, driven by the company's proprietary AVR, standard ARM and touch-sensing products.

"We are pleased to have reached the upper end of our revenue guidance in spite of the challenging macroeconomic environment," said Steven Laub, Atmel's president and CEO in a statement.

Buoyed by the strong performance of its MCU portfolio, it is no surprise that Atmel's strategy centers on this product. MCU is Atmel's fastest growing product, and the company anticipates double-digit growth for the line, growing 20 percent year-on-year, noted Yang Chiah Yee, VP of Asia sales.

"Focus is really on MCUs, and obviously on high-growth, high-margin proprietary products and technologies," explained Yee in an interview with EE Times-Asia. "We will also continue to look into possible acquisitions that will add more value into our MCU portfolio," Yee added.

Early this year, Atmel acquired Quantum Research Group Ltd, a developer of capacitive sensing IP and user interface solutions. The deal gave Atmel an immediate presence in the capacitive sensing market, one of the fastest growing segments for MCUs.

"Our core strategy is moving from a company not only selling MCUs, but a company selling MCU system solutions," stressed Yee.

Apart from enriching its MCU portfolio, Atmel is also adopting a fab-lite strategy. The company�s embrace of the fab-lite route began in 2006 with its announcement of intent to sell its wafer facilities in North Tyneside, U.K. and Helibronn, Germany.

Then in 2007, Atmel sold its wafer fab in Irving, Texas to Maxim Integrated Products Inc. The same year also saw Atmel entering into separate agreements with Taiwan Semiconductor Manufacturing Co. Ltd and Highbridge Business Park Ltd for the sale of its 8-inch wafer fabrication equipment and related property located in North Tyneside.

In addition to shedding its IDM strategy, Atmel is also looking into boosting its OEM channel relationships, which translates to "expanding our technical sales relations, with our sales team reaching our customers directly, as well as enhancing our relationships with our broad base of customers," explained Yee.

The restructuring of Atmel has been fruitful so far, and the company is "absolutely positive about achieving its goals," remarked Yee.

China story
A key component in achieving its goals is the company's presence in Asia. Yee explained that Asia has been the largest revenue generator for the company for the past seven to eight years, and China is the largest revenue contributor in the region.

"The story is all about China. We are investing not only in our sales force but also in our technical sales resources. We are probably looking into doubling our technical resources in China," said Yee.

Last year, the company stepped up its investment in the China's semiconductor market with the introduction of products and technologies designed specifically for China's consumers. These include the AVR MCUs that incorporate picoPower power-saving technologies.

Atmel is also eyeing the growing need to protect digital content such as voice, data, video and audio. It offers a complete line of electronic and biometric products, targeting applications such as secure financial transactions, identity protection and PC security.

And of course there's China's growing automotive industry. Here Atmel is focusing on under-the-hood control, GPS, convenience and entertainment, and safety and security applications.

Such investments directly support the work already being undertaken by the company's design centers in Beijing, Shanghai and Shenzhen, along with offices in Nanjing and Chengdu.

How about in other parts of Asia such as India, Vietnam and Taiwan?

"India is a very interesting location. India started in the IT space. The infrastructure needs to catch up for manufacturing and hardware," explained Yee. However, he acknowledged that India is growing in importance in the design field.

Vietnam, on the other hand, is more into contract manufacturing, Yee pointed out.

Growing Taiwan
"Taiwan is most of the time overshadowed by mainland China's growth," remarked Yee. A significant portion of mainland China's growth, however, can be attributed to Taiwan companies that have moved their production to China, said Yee.

"It really depends on what angle you look at Taiwan from. ODMs like Asus, Hon Hai, the laptop guys Quanta and Compalthese guys are growing the region," added Yee.

Asia is also important in Atmel's plans to reduce production costs, which include the relocation of some activities to lower-cost operation areas, said Yee. This strategy has been adopted not only by Atmel, but also by a host of other companies to cope with the effects of the U.S. economic slump on development plans and strategies.

Yee was quick to point out that in terms of investment, Asia is very much independent from the United Statesthus, most companies are still brimming with optimism when talking about their business in Asia.

"The nature of the global economy is, if there is an economic slowdown in the U.S., there will definitely be an effect. However, I wouldn't go to the extent of saying that we feel jittery. People are still optimistic, albeit with caution," explained Yee. And one area that is heading towards a bountiful future is the use of 32bit MCUs by Asian engineers.

"The movement is clear. Asian engineers are looking into more integration today. MCU is no longer a general-purpose device. It now comes with added functionalities�with USB, with MAC, mixed-signal functionality, the like. People are jumping very quickly from 8bit to 32bit."

- EE Times-Asia

- With additional reporting from Mark LaPedus

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