MUNICH, Germany After refocusing on power management and audio products in its FY 2006, Dialog Semiconductor (Kirchheim/Teck, Germany), saw revenues plunge 45 percent. In order to emphasize its new strategy, the company now is launching a design center in Edinburgh, Scotland.
Sales of the fabless chip vendor declined from 128 million ($170.8 million) in FY 2005 to 71.3 million. Losses widened from 23.3 million to 33.4 million.
The decline was caused in part by Dialog having spun off its imaging business in the past year. Another factor was the BenQ Mobile insolvency as a major customer. In addition, the company blamed the slow transition in the mobile phone market from 2G to 3G for the poor results.
For the year ahead, the company expects a return to growth. In the first half, however, the market will feature similar conditions as in the fourth quarter when sales bottomed at 10.5 million but losses were narrowed in comparison to the fourth quarter of 2005. During the first half, Dialog expects 3G volume production to ramp up, which will spur growth in the second half. CEO Jalal Bagherli pointed out that the company does not have any debts but, in contrast, is in funds at a value of 39 million.
In terms of products, the company intends to broaden its portfolio of power management chips for mobile handsets, consumer goods, automotive and industrial applications.
In order to strengthen its R&D activities in these segments, Dialog is in the process of launching a new design center in Scotland. Bagherli called the design center a cornerstone to the company's strategy to offer smart system-on-chip products. The company intends to hire more than 50 engineers with qualification profiles ranging from analog/mixed signal to SoC design expertise. Dialog Engineering vice president Gary Duncan said the reason for choosing Edinburgh was local design competency, innovation culture and universities with appropriate research programs.
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