SOUTH PORTLAND, Maine-- Fairchild Semiconductor International Inc. expects revenues to grow 35% in 2000 over last year's $1.3 billion in sales as demand increases for "multi-market" building-block devices, said top company officials during a briefing for Wall Street analysts.
Fairchild is not only banking high demand for building-block chips, but it is also counting on fewer players in this semiconductor segment as large competitors narrow their focus on system-level ICs. Fairchild president and chief executive officer Kirk Pond predicted that the multi-market building-block field will be narrowed to a few major players in the next several years.
"We intend to be a dominant player," Pond told financial analysts on Wednesday. "We've doubled our revenues in three years to more than $1.6 billion," he said referring to the current run rate of the company, which was spun out of National Semiconductor Corp. in 1997.
"We have developed 500 new products in the same timeframe, and acquired three companies, each of which brought us into new, lucrative markets," Pond added. "By staying completely focused on the multi-market opportunity, while others pay little or no attention to those areas, we expect to double our revenues again by 2002."
Fairchild defines the "multi-market" segment as being characterized by high performance building-block products that perform critically important functions in abroad spectrum of end-user products and applications. These products include discrete devices, analog chips, interface ICs and standard logic.
While Fairchild is playing in the building-block segment--which is often characterized by other chip makers as "commodity" parts--the company's new products have taken off "faster than we anticipated," said Joseph Martin, Fairchild's executive vice president and chief financial officer.
The CFO predicted that Fairchild's revenue growth in the second quarter would reach 5-to-6% over the first quarter. The South Portland company posted revenues of $401.7 million and a net income of $50 million in the period ended April 2.
Including Fairchild's acquisition of QT Optoelectronics Inc. of Sunnyvale for $97.8 million last month (see May 31 story), the company expects its total revenues to grow 35% this year, Martin said.
Based on market figures from the Semiconductor Industry Association (SIA), the company estimated that the multi-market chip segment will reach $60 billion by 2002. Fairchild is aiming to take 10% of that market as part of its Phase II growth strategy, which includes plans for more acquisitions and increases in production capacity, according to Pond.