SAN JOSE, Calif. – Microchip Technology Inc. (Chandler, Ariz.) is a profitable microcontroller company that is expanding by organic growth and by acquisition. But what direction is CEO Steve Sanghi is taking the company in?
"Ten or 15 years ago we used to think that every toaster, every fridge would be connected to the Internet and order things for us online. That was crazy. I don't buy milk that way," Sanghi told EE Times in an interview on the fringes of the DESIGN West exhibition and conference last week.
Instead, Sanghi shows the example of how--using his cell phone--he can interact with his latest ride, a Tesla electric vehicle parked at his house in Arizona. He can locate the vehicle, open the sun roof, turn on the air conditioning, check the battery status and much more besides. That casual demo sums up three trends Sanghi sees driving the semiconductor industry.
The trends are: The Internet of Things (or wireless connectivity as Microchip prefers to call it). most things to do with the energy complex--that's low energy consumption, power generation, charging of batteries, and so on. And opportunities in automotive applications.
Wired and wireless communications have been part of electronics since birth so what is changing? "Connectivity has evolved and the price points have changed," Sanghi said. And Sanghi has been on a spending spree in recent years to reshape Microchip for the coming opportunities. "We acquired Roving Networks a year ago--a vendor of Bluetooth wireless modules and other connectivity solutions. They have been incredibly successful since then," said Sanghi.
Microchip also acquired Standard Microsystems Corp. in 2012 for about $750 million bringing expertise in low-power USB, Ethernet, wireless audio and automotive applications.
Industry evolution is also changing Microchip's core business as a provider of MCU components. As technology and markets evolve it becomes appropriate for Microchip to provide more of the solution and system knowledge, at least for some applications and some customers.
"We can provide Wi-Fi stack software, a wireless module and our micro. We also provide reference designs, say for a wireless thermostat or air-conditioning controller," he said. Sanghi adds that such reference designs can be key in making a sale, by demonstrating that a certain MCU has enough performance or enough memory for the application. "U.S. customers tend to look at the reference design to gain confidence in the components and then go and re-do the design. In Asia they are more likely to take the reference design and go into production with it," said Sanghi.
Steve Sanghi, president and CEO of Microchip Technology Inc., is driving the company forward – in a well-connected Tesla.