PHOENIX ON Semiconductor here today announced plans to triple its spending on research and development by 2001, compared to 1999 levels, with a long-term target of R&D expenditures set at 5-to-6 percent of revenues this decade.
ON, a spin-off from Motorola Inc., spent about $37 million on R&D in 1999, which represented 2.3 percent of its revenues, according to company officials. ON Semiconductor said about 80 percent of its R&D this year is aimed at strengthening its position in analog power management and broadband chip applications.
ON Semiconductor also said it reached a key milestone in having its IC revenues exceed discrete sales during the second quarter of 2000. The Phoenix company was formed a year ago with a $1.6 billion management buyout, which created the world's largest supplier of discrete, standard analog and logic devices, ON Semiconductor officials said.
Since the spin-off from Motorola, the company has increased its emphasis on creating new IC products. The increased R&D spending will be aimed at developments for smaller battery-operated portable products, cellular phones with longer talk times, faster and more reliable computing on the Internet and the creation of new automotive electronic systems, said ON Semiconductor officials.
"Our strategy is to grow the business and increase revenues both organically and through acquisitions," said Steve Hanson, president and chief executive officer of the company. "The plan to increase R&D spending during each of the next two years demonstrates our commitment to accelerate new product introductions ahead of the market and to drive growth. We are anticipating our customers' needs by developing innovative solutions that will help them bring their products to market faster."
ON Semiconductor said it plans to launch more than 400 new products in 2000 a 100 percent increase from last year. Last month, the company inked a cross-licensing pact with Siliconix to increase its development of power management devices.