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AnalogicTech stays 'fabless without foundries'

Posted: 21 May 2009 ?? ?Print Version ?Bookmark and Share

Keywords:analog market? power management? fabless?

IC market recovery?

Any exceptions to the rule?
Maybe LED backlight is a little more generic, but it also has been more commodized. People who did have LEDs had to start dropping the prices to keep out the people that didn't have LED. But suddenly, the number of suppliers in that market went from maybe five to 40 or 50. You know what that means? The price keeps hurdling on down. The products that are still generic are the industrial market. In maybe the future, that will become more specialized.

Any signs of an IC recovery?
We've definitely had increased business. Our lowest bookings month was November. Every month since then has increased. Not necessarily linearly. We believe the top-tier guys are showing true demand increases. The third- and fourth-tier suppliers, especially in the handset space, are handled through distribution. There you can't tell what's replenishment and what's demand.

Do you see a second half recovery?
It's hard to tell, but the bookings are picking up gradually. The handset is picking up. The smart phone is not picking up as fast as the ultra-low cost handset. The gadgets are not picking up as fast. GPS and hands-free car kits have not picked up. The notebook has not picked up in a big way.

Will we ever see major mergers and consolidation in analog?
The lack of a common platform is why that doesn't happen in analog. If you find that special sauce that each analog company has, it's like a recipe. And it's different. It's like consolidating RC Cola, Pepsi and Coke. They just don't believe in the other guy's recipe. And there is no way to mix those product lines. So they will die fighting to preserve their secret recipes. That's why M&A has been challenging and unsuccessful in the broad-based analog market. For example, if you take a mid-tier company and merge it into On Semiconductor, all that happens is that the competitiveness of the mid-tier company goes away.

You are a fabless analog player. Some say you need a fab to survive in analog. Some say you need to work with a generic foundry in analog. Which is the real case?
We started our company on the principal that both views are wrong. A general broad-based foundry commercializes every bit of intellectual property they have among all the analog customers. And that takes away some of the advantages that they have on their competition.

We know the fab model has inflexibilities. For example, I was at Siliconix for 18 years. We ended up with a German fab. Then, we stopped asking what the customer needs. We started asking: 'What can we use to fill that fab?' It was like operations had suddenly taken over the company. We were not asking about the market. We were only asking about the fab. That's the problem. When owning a fab, it's almost obsolete before you sign the paperwork.

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