For a while, it seemed as if AMI Semiconductor Inc. would soon be counted among the lost in the ASIC field
as its core gate-array market slowly evaporated.
Though the Pocatello, Idaho, company sustained annual revenue in the range of $200 million to $300 million largely by converting FPGAs to ASICs, as a long-term survival strategy that didn't hold up.
After a series of restructurings and a brief incarnation as a wireless ASIC house, AMI in 2001 brought in Christine King as chief executive to reset the company's strategy.
While leading ASIC suppliers--including King's previous employer, IBM Microelectronics--homed in on high-end communications and consumer applications, AMI channeled its resources into less exciting but stable segments where it already had a strong presence. Medical was prominent among them.
"The first thing Chris said was, 'We need to figure out what we do really well and stop worrying about keeping up with leading-edge companies,' " said Jonas Weiland, strategic marketing manager for medical products at AMI.
AMI's low-cost, moderate-volume manufacturing capability has long served it well in markets like automotive, communications, and industrial. But with a long history of supplying mixed-signal and sensor products for medical equipment, and with a stable of more than 200 analog/mixed-signal design engineers, the medical market seemed like a natural direction in which to grow, Weiland said.
Last year, AMI acquired Alcatel Microelectronics' mixed-signal ASIC business and Microsemi Corp.'s MicroPower products, gaining vital high-voltage, RF, and ultralow-power capability to address emerging requirements for medical devices, including hearing aids, implantable devices, portable monitors, and imaging equipment, he said.
The company now possesses technology to support power requirements from 1 to 100V using 0.5- and 0.35-micron digital gate-array ASICs and 0.18-micron cell-based ASICs partially processed at Taiwan Semiconductor Manufacturing Co. Ltd.
A cornerstone of the medical strategy is AMI's application-specific transmit and receive ICs (ASTRIC), a low-cost, low-power, sub-1GHz wireless technology that allows hearing aids and implanted devices to be remotely controlled and monitored. ASTRIC supports narrowband ASK and IEEE 802.15.4 transceiver specifications. Evaluation samples are expected to be released shortly, Weiland said.
AMI has done a good job of recreating itself to serve niches where there isn't much competition, according to Jordan Selburn, an analyst at iSuppli Corp. in San Jose.
"If you go back a couple of years, they were the end-of-life ASIC company. Now they've really become the mixed-signal ASIC company," Selburn said. "They've done it by focusing internally, and the acquisition of Alcatel Microelectronics strengthened that base of technology that finds a home in areas like medical and automotive. It gives AMI a pretty solid niche to go after what you don't really see being pursued by larger ASIC companies."
So far, the moves haven't netted measurable gains. In 2002, AMI attributed 11% of its $345.3 million in revenue to medical, about the same percentage as in 2001 on revenue of $326.5 million.
BCC Research Inc. forecasts that the U.S. market for medical imaging equipment will grow from $8.2 billion in 2002 to $10 billion in 2007. The Norwalk, Conn., firm expects the market for microelectronic implants to grow from $4.3 billion in 1998 to more than $9 billion this year.
While it's difficult to size up the overall medical IC market, approximately 35% of 2001 revenue was from ASICs, the rest being composed of off-the-shelf parts, mainly power transistors, according to Sunderaju Ramachandran, an analyst at Frost & Sullivan, San Jose.
The broader industrial/medical ASIC category grew 7.5% in 2002, while other ASIC segments declined, said Rich Wawrzyniak, an analyst at Semico Research Corp. in Irvine, Calif. Semico forecasts 3% growth for the segment this year, followed by 15% growth in 2004.
AMI's long participation in the medical IC market has been primarily as a foundry, but increasingly is focused on designing custom ICs, according to a company spokeswoman.
Cyberonics Inc., Houston, is using a custom AMI chip in an implantable nerve stimulator, the first FDA-approv-ed implant for treatment of neurological disorders.
AMI hopes this year to stretch out by spinning ASICs into higher-volume standard products for hearing aids and implantables, which are moving away from custom approaches by employing RF transceivers to make patient-specific adjustments.
"Segments like medical, automotive, and industrial aren't necessarily glamorous, but there are steady, stable customers that are often household names," Semico's Wawrzyniak said. "There is no reason why somebody like AMI couldn't do great business selling to those companies."