SAN JOSE, Calif. -- Who could make a big play in analog?
Try Freescale Semiconductor Inc. That appears to be evident, especially when the troubled chip maker this week named Rich Beyer as its new chairman and CEO, effective March. Beyer comes to Freescale from analog chip maker Intersil Corp., where he was CEO and a member of its board of directors.
Freescale sells a smattering of analog parts. But at present, Freescale (Austin, Texas) is a relatively small player in the overall analog business, but that's the problem. Loss-ridden Freescale needs to find new markets--and fast. And unlike digital, analog is growing at a decent pace.
''The eventual possibility of a large analog competitor may occur with Freescale under Rich Beyer,'' said analyst Doug Freedman of American Technology Research Inc., in a report. ''Rich Beyer's successful analog track record is attractive to Freescale, as private equity investors are eager to return the company to profitability.''
Freescale may want to take a page from one of its rivals, possibly Texas Instruments Inc. Over time, TI has transformed itself from being a digitally-oriented ''DSP company'' to an ''analog company.'' In fact, TI is the world's largest analog vendor.
Under Beyer, Freescale could go in several directions. ''Freescale is currently a minor player in areas Intersil competes in, but could grow an analog business in several possible ways: 1) Through acquisitions, developing high-performance analog products to drive revenue growth and earnings and also offset lower margin business (i.e. the TI playbook) 2) Integrate analog functions and other logic around its embedded microcontroller family to create flexible SoCs used in industrial and automotive applications (i.e. the Cypress playbook),'' Freedman said.
Some wonder if Freescale could one day acquire Intersil, which is a mid-sized analog play. It's unlikely that Freescale would acquire the other big analog houses, such as ADI, Maxim and Linear Technology.
Databeans Inc. believes the analog sector had a flat 2007, but the firm expects 12 percent analog growth this year.
''I don't agree with Databeans that we'll see an uptick in 2008,'' said Steve Ohr, an analyst with Gartner Inc. ''At best, 2008 will mirror 2007, which was only a 4 percent year for analog; at worst, recession will happen and revenue growth will fall off in the later half of this year.''