Attempting to rebound from more than $15 million in losses and dwindling revenue over the past three years, IMP Inc. is moving forward through new investment and a strategy of seizing opportunities in standard power management and BiCMOS foundry production.
"The market for analog is hot," said Brad Whitney, who joined IMP in January as president and chief executive in an attempt to turn the company around. "It's going to be hot for a good while. When you look at some of the bigger companies that have made acquisitions in the analog space, it demonstrates that there are opportunities for guys like us to carve out a nice piece of business."
Founded in 1981, IMP, San Jose, has gone through several cycles of product emphasis -- from standard-cell analog implementations to read-channel ICs for hard drives and foundry services for modems.
The company fell on hard times in 1997 when two major customers stopped production at IMP. Iomega Corp., which in 1997 represented 39% of IMP's revenue, decided to move to a new-generation read-channel IC, and believed IMP's fab could not sufficiently produce it.
IMP had also been serving as a foundry for Rockwell Corp.'s 28-Kbit/s modems, and the company accounted for 33% of IMP's business in 1996. That business plummeted to less than 10% of revenue by 1998 as Rockwell moved to more advanced modems.
IMP's revenue fell from $65 million in its 1997 fiscal year to $40 million a year a later, while income dropped from $12.4 million in 1997 to a $3.8 million loss in 1998 and a $7.9 million deficit in 1999.
The company began efforts to refocus on standard analog devices, specifically power-management ICs, and its first chips were introduced in 1998.
"The prior management team was focused on getting IMP into standard products, and in my view that's still the right approach," Whitney said. "Standard products can be very long-lived and very successful."
Whitney came to IMP after serving as corporate senior vice president of new business development at Bourns Inc. Previously, he was president and chief operating officer at Linfinity Microelectronics Inc., where he engineered the company's transformation from military to commercial analog-IC supplier.
He also spent 12 years at Texas Instruments Inc., where he led the company's standard-linear-products business unit.
"When I came to IMP, I wanted to continue the activities of the prior three months, reduce the drain on cash, maintain cost, and get the transaction with Teamasia consummated as quickly and as efficiently as possible," Whitney said.Teamasia Semiconductor (India) Ltd., based in Andhra Pradesh, India, provides foundry services for discrete and analog semiconductors and similar services for ICs.
In October 1998, Teamasia made a $2 million investment in IMP, followed by a $4 million investment in June, which now makes Teamasia a 62% shareholder in the company.
"The Teamasia investment was crucial from a cash-balance point of view and has given us the money we needed to operate going forward," Whitney said. "The company was cash starved ending the December quarter."
IMP will serve as a foundry for Teamasia, part of an overall effort to improve its foundry business, which represents about 75% of the company's revenue stream.
"One of the things I did when I came in was to re-emphasize the critical nature of our foundry business," Whitney said. "We made a directional change in now focusing on major customers such as International Rectifier and National Semiconductor, instead of offering general foundry services to every small outfit in the world."
IMP operates a 5-in.-wafer BiCMOS fab that is 0.8-micron capable, sufficient for production of most standard analog ICs, and the company is adding new equipment to expand the fab.
"A nice thing about analog and mixed- signal is they generally don't require deep-submicron," Whitney said. "We're also able to buy equipment for dimes on the dollar compared to the original cost."
Going forward, Whitney believes that a standard-product focus on power management will generate business that will expand faster than IMP's foundry business, although the company is faced with significant competition from companies such as Texas Instruments. TI last year bolstered its power-management effort by acquiring Unitrode Corp., which had previously acquired Benchmarq Electronics Corp.
"I love competition and see it as beneficial," Whitney said. "There are some big players out there, but big players have weak spots, and there's always room for new players that are able to take advantage."