SAN JOSE, Calif. - X-Fab Silicon Foundries Group is struggling and has fallen behind its rivals.
In an apparent move to reverse the trend, X-Fab is bringing in a new executive with an engineering background. The company said that Rudi De Winter will join the board and will also assume the role of co-CEO, effective Feb. 14, 2011.
In his new role, De Winter will work closely with Hans-Juergen Straub, the current CEO of X-Fab, ''and (will) join him to accelerate the company’s growth,'' according to German specialty foundry vendor X-Fab (Erfurt).
De Winter will be responsible for R&D, marketing, sales and quality. Straub, who is now co-CEO, will focus on operations, finance and control, human resources and administration. De Winter, who began his career as a development engineer in the semiconductor industry 25 years ago, served the last 14 years as CEO and co-CEO of Melexis.
X-Fab was the 12th largest foundry in 2010, according to IC Insights. But in the rankings, it has fallen behind its rivals in the specialty foundry arena. X-Fab directly competes against TowerJazz, Vanguard, Dongbu, among others.
X-Fab has made several acquisitions and moved to bolster its foundry operations, but it has recently lost money. It is strong in the cyclical automotive market, but it has struggled to expand beyond that sector. In some ways, X-Fab has lost its focus; it has entered into several areas, such as opto, sensors, MEMS and even printed electronics. And some of its fab acquisitions have been shakey at best.
In November, X-Fab announced sales of $239.3 million for the first nine months of 2010. This represented a year-on-year increase of 66 percent. X-Fab’s third-quarter sales revenue was $83.2 million, an increase of 39 percent compared with the same quarter the previous year.
Earnings before interest and taxes (EBIT) in the first nine months were minus $12.8 million. This is an improvement of 72 percent compared with the same period the previous year. EBIT in the third quarter was minus $6.2 million, a year-on-year improvement of 43 percent.
X-Fab said it would become profitable by the fourth quarter of 2010. It has not released its sales for the period.
Meanwhile, X-Fab's rivals are taking steps to grow their business. For example, at a recent event, Russell Ellwanger, CEO of TowerJazz Inc.,disclosed that the specialty foundry vendoris looking to make an acquisition.
The darkhorse in this market is Taiwan Semiconductor Manufacturing Co. Ltd., which is beefing up its analog, mixed-signal, MEMS and related offerings.
X-Fab itself has taken several steps to expand its specialty foundry business. X-Fab maintains wafer production facilities in Erfurt and Dresden, Germany; Lubbock, Texas; and Kuching, Sarawak, Malaysia. It employs approximately 2,400 people worldwide. Wafers are manufactured based on advanced modular CMOS and BiCMOS processes with technologies ranging from 1.0- to 0.18-micron, for applications primarily in the automotive, communications, consumer and industrial sectors.
In 1999, X-Fab acquired a Texas fab from Texas Instruments Inc. Then, in 2002, the foundry provider acquired a U.K. fab from Zarlink Semiconductor. In 2007, X-Fab acquired Malaysian foundry 1st Silicon Sdn. Bhd. In 2007, X-Fab acquired Zfoundry, the wafer production facilities of Germany's ZMD.
In 2009, X-Fab and Swindon-based Plus Semi agreed on the sale of X-Fab's wafer fabrication plant in Plymouth, U.K., to Plus Semi.
Last year, X-Fab became the first pure-play foundry to deliver integrated Hall Sensor functionality as a fully characterized, low-power, highly sensitive and ready-to-use magnetic Hall sensor device. The company recently expanded its 0.35-micron technology offerings with what the company claims is the first foundry technology optimized for Blu-ray and high-speed optical data communication applications.
In 2010, X-Fab signed a development agreement with Semprius Inc. to provide turnkey silicon wafer fabrication for Semprius' customers. Under terms of the agreement, X-FAB made a strategic investment of $1.5 million in Semprius and will be the designated foundry for Semprius technology. Semprius develops novel technology for the manufacture of advanced semiconductor devices. The technology enables "point-of-use electronics," broadening the options available to designers of advanced electronic devices.
Last year, X-Fab expanded its foundry service to include 200-mm MEMS wafer processing. This move to 8-inch MEMS production is in response to explosive growth in MEMS, largely driven by emerging high-volume applications. Earlier this month, X-Fab and MEMS Foundry Itzehoe GmbH (MFI) joined forces to address the market for high-volume MEMS and will combine their existing MEMS foundry capabilities and resources. Germany's X-Fab acquired a 25.5 percent shareholding of MFI., subject to antitrust approval, with the option to become the majority shareholder at a later date.
"De Winter will be responsible for R&D, marketing, sales and quality. Straub, who is now co-CEO, will focus on operations, finance and control, human resources and administration. "
A 2-CEO approach may not be the best for a company with single focus. Sure it worked somewhat well for Motorola, but then both CEOs were handling different business segments of the company. In this case both the CEOs hold somewhat conflicting tasks, for eg. the R&D ,Marketing, Quality CEO will want to spend money/increase spending but the Finance/Operations/Admin CEO will want to save money/reduce spending. High chances for conflicts !
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