For years, analog has been a steady business. Then, suddenly, the bottom has fallen out of the analog sector due to the downturn. ADI, Fairchild, Linear, Maxim, National, TI and others are seeing an unprecedented drop in business.
To explain the current issues in analog, EE Times caught up with Richard Williams, president, CEO and chief technology officer of Advanced Analogic Technologies Inc. (Santa Clara, Calif.), a fabless analog chip vendor. Formed in 1997, the company--sometimes called AnalogicTech--is a supplier of power management semiconductors for consumer, communications and computing electronic devices.
Williams, a candid executive who refuses to pull any punches, explains the changes in the analog market and the current business climate. He also outlines AnalogicTech's strategy, including its push towards integration and its concept of being fabless without foundries.
The company's sales are somewhat tied to the handset, but it is expanding into new markets. Samsung is its largest direct customer. Sales to Samsung accounted for 20 percent of its net revenue in 2008.
It has also seen its share of challenges. Revenue for the fiscal year ended Dec. 31, 2008, was $90.3 million, down from revenue of $109.6 million for 2007. Net loss for fiscal year 2008 was $18.4 million, compared to net income of $1.9 million for fiscal year 2007.
Despite the results and downturn, Williams is upbeat. In fact, he says ''chaos'' is good for the company.
EE Times: Where does AnalogicTech fit in the analog world?
Williams: We are primarily focusing on the power management portion, which is a subset of the whole analog space. You have analog in RF. That industry has figured out how to make no money and how to do the most difficult technology on earth. How three suppliers can take all their margins away is beyond me. We don't want to go there. Then, there is analog for signal conditioning and data conversion. Analog Devices is the mother of that portion of the market. We are not doing that other than possibly some interface functions.
Where we come in is the power space. We look at power as four very broad areas. Display and lighting solutions. Battery management. The third category is the interface and audio. The last one is voltage regulation and DC-to-DC conversion. What we set to do is have a total power management solution.
EE Times: Where are we in the IC downturn in relation to analog?
Williams: There is more of a coupling to the economic cycle in analog than there has been in the past. In the past, people took general purpose analog components and they built a battery charger or voltage regulator or an audio amplifier. And they used that for a bunch of different products. That same product served all the markets. And as a result, even if one market sector went down, another market kept going.
In this downturn, two things have changed. This is one of the few downturns in 50 years that has cut across almost every market. Maybe medical did not get hit as bad.
More importantly, in the last ten years, the demand of the consumer to get the most optimized performance out of every little widget that they buy has caused power management solutions to become more specialized to that end market. So the day I make that switching regulator and I sell it to satellites, cells phones and computers is gone. The analog market has to track the end market. They are coupled and can't break away from each other.