Analog vendors are ripe for consolidation
: TI is known for a conservative financially management strategy. In fact, some of your top executives have said previously they don't believe in large acquisitions. Is TI ruling this out to build out its analog market share?
Lowe: I am not sure about that. I think the Burr-Brown acquisition remains the largest acquisition in the semiconductor business. Certainly, when we did the acquisition in 2000, it was the largest acquisition in the entire history of the semiconductor business. That was an $8 billion acquisition and it involved thousands of people with high risk and rewards.
Nine years later, I think we can clearly state that acquisition was transformational for the company and the integration of Burr-Brown was done so successfully that it has become the basis of what's driving the entire company.
EE Times: If TI wants to do what you are saying, that is build market share aggressively, it will have to make another major acquisition. Is the company looking to do this? The landscape is certainly ripe for consolidation.
Lowe: We've done now four acquisitions in the last year or so. We continue to make acquisitions but smaller pieces to fill in gaps in the portfolio. Our view right now is that the portfolio we have is extensive and we don't have large gaps. While we don't rule out doing a big acquisition the concentration really as demonstrated by our actions is really more in the smaller space.
EE Times: What industry trends are you looking at?
Lowe: We are working very closely with our DSP business to develop solutions that look across both the analog and the embedded processing space.
Also, when you look at trends in the industry there are two strong ones right now. One of them is everything about low power and energy savings. We have a very broad and comprehensive set of products in areas like the sources of energy, the transmission of energy and the consumption of energy. We are trying to figure out how TI technology can improve the three.
EE Times: What is your current reading of the market situation and is TI doing anything special to counter demand weakness?
Lowe: The analog market is the most fragmented segment of all the semiconductor markets. We are in all high-tech equipment, which then implies that analog is dependent upon an economy that is strong in order to grow. Obviously, the economy is not strong right now so the analog market is down
All of our customers are having economic issues themselves. Many of them have reduced their engineering work staff, etc. The fact that TI has a broad analog portfolio, combined with the fact that our sales force is deployed throughout the world, allow us to help our customers solve their application problems faster.
The fact that we have application teams in Mumbai, Delhi, Hyderabad, Calcutta and 13 different cities located throughout China, for instance, allows us to help them through this difficult economic time to continue developing great new products that would help them grow.
I've had quite an experience with this myself. I was in China last week and I was in India earlier in the year in non-traditional areas of these countries. We visited 21 companies when I was in India and I think two-thirds of the time we walked out of the meeting with new products designed into our customers' systems because we had application teams there working with the customers.
These customers didn't have time to go and figure out who to call at which company. They simply call the local extension of their applications and design teams. That's a very powerful thing in this economic downturn. The companies that are strong, that are engaged with customers and that have the financial capability to continue to invest are definitely going to get stronger.
EE Times: A lot of people tend to see TI primarily as a DSP company despite the large analog portfolio. Do you envisage a time when this image might change?
Lowe: Obviously, we are attempting to grow our analog business very quickly and faster than the overall market and quite possibly faster than the rest of TI simply because the opportunity is there. As we continue to be successful in the analog business that will be a natural transition.