We are a world leader in the design, manufacture and marketing of high-performance
analog, mixed-signal and digital signal processing integrated circuits used in
signal processing for industrial, communication, computer and consumer applications.
Since our inception in 1965, we have focused on solving the engineering challenges
associated with signal processing in electronic equipment. Signal processing is
where the analog and digital worlds meet to provide the advantages of digital
technologies to the real world. Our products play a fundamental role in converting
real-world phenomena such as temperature, motion, pressure, light and sound into
electrical signals to be used in a wide array of electronic equipment ranging
from industrial process control, factory automation systems equipment, defense
electronics, base stations, central office equipment, wireless telephones, computers,
automobiles, CAT scanners, digital cameras and DVD players. Signal processing
is the cornerstone of high-speed communications, digital entertainment, and other
consumer, computer and industrial applications. As new generations of digital
applications evolve, they generate new needs for high-performance analog and digital
signal processing, or DSP, technology. We produce a wide range of products that
are designed to meet the technology needs of a broad base of customers.
Principal Products
We design, manufacture and market a broad line of high-performance ICs that
incorporate analog, mixed-signal and digital signal processing technologies.
Our ICs are designed to address a wide range of real-world signal processing
applications. Across the entire range of our signal processing ICs are both
general purpose products used by a broad range of customers and applications
as well as application-specific products designed for specific clusters of customers
in vertical markets. By using readily available, high-performance, general-purpose
products in their systems, our customers can reduce the time they need to bring
new products to market. Given the high cost of developing customized ICs, our
standard products often provide the most cost-effective solution for many low
to medium volume applications. In some communications, computer and consumer
products, we focus on working with leading customers to design application-specific
solutions. We begin with our existing core technologies in analog and DSP, and
devise a solution to more closely meet the needs of a specific customer or group
of customers. Because we have already developed the core technology for our
general-purpose products, we can create application-specific solutions quickly.
We produce and market several thousand products. Our ten highest revenue products
accounted for approximately 17% of our revenue for fiscal 2004. The majority
of our products are proprietary, meaning equivalent products are not available
from competitors. A limited number of other companies may provide products with
similar functions.
Analog Products
Our analog'IC technology has been the foundation of our business for nearly
four decades, and we believe we are one of the world's largest suppliers of
analog'ICs. Our analog'ICs are primarily high-performance devices, generally
defined as devices that support a minimum of 10-bits of accuracy and a minimum
of 50 megahertz of speed. The principal advantages these applications have versus
competitors' products include higher accuracy, lower cost per function, smaller
size, lower power consumption and fewer components for improved reliability.
The majority of our analog'IC product revenue is attributable to sales of data
converters and amplifiers. The data converter and amplifier product categories
represented approximately 60% of our fiscal 2004 revenue. Other analog'IC products
include analog signal processing devices such as analog multipliers, switches,
multiplexers and comparators. Over the past several years we have been expanding
our analog'IC product offerings along the entire analog signal chain and into
product areas such as radio frequency integrated circuits, or RF'ICs, and power
management products such as voltage regulators and thermal monitoring'ICs.
The majority of our analog'IC products are proprietary to us in their design
and general purpose in their application. This allows customers to incorporate
our products into a wide variety of electronic equipment and systems. Our product
portfolio includes several thousand analog ICs, any one of which can have as
many as several hundred customers. Our analog'ICs typically have long product
life cycles. Our analog'IC customers include both original equipment manufacturers,
or OEMs, and customers who build electronic subsystems for integration into
larger systems.
Our analog technology base also includes products using an advanced IC technology
known in the industry as surface micromachining, which is used to produce semiconductor
products known as micro-electromechanical systems, or MEMS. This technology
enables extremely small mechanical sensors to be built on the surface of a chip
along with supporting circuitry. In addition to incorporating an electro-mechanical
structure, these devices also have analog circuitry for conditioning signals
obtained from the sensing element. The integration of signal conditioning and
MEMS is a unique feature of our products which we call iMEMS'. Our iMEMS product
portfolio includes accelerometers used to sense acceleration, and gyroscopes
used to sense position. The majority of our current revenue from micromachined
products is derived from accelerometers used by automotive manufacturers in
airbag applications. However, revenue from consumer and industrial customers
is increasing as we develop products using this technology for applications
in these end markets.
DSP Products
DSPs are processors that are optimized for high-speed numeric calculations,
which are essential for real-time processing of digital data resulting from
analog to digital signal conversion. Our DSP products are designed to be fully
programmable and to efficiently execute specialized software programs, or algorithms,
associated with processing digitized real-time, real-world data. Programmable
DSPs provide the flexibility to modify the device's function quickly and inexpensively
in software. We offer both general-purpose and application-specific DSP products.
General-purpose DSP IC customers typically write their own algorithms using
software tools that we provide and software tools they obtain from third-party
suppliers. Our application-specific DSP products typically include analog and
DSP technology and the DSPs are preprogrammed to execute software for applications
such as wireless telecommunications or image processing. Our DSPs are designed
in families of products that share a common architecture and therefore can execute
the same software. We support these products with specialized applications and
easy-to-use, low-cost development tools, which reduce our customers' product
development costs and time-to-market.
Increasingly, many of our products combine analog and digital signal processing
technology into multi-function mixed-signal devices and chipsets. The growing
technological demands associated with the use of audio and video in computers
and consumer products as well as the networking of communications systems has
created new opportunities for these mixed-signal products. Examples of these
products include chipsets for communication applications such as global system
for mobile cellular phones, or GSM, cable modems, and broadband modems. Other
examples include audio input/output devices for computer applications and electric
motor control devices for industrial instrumentation.
Markets and Applications
The following describes some of the characteristics of, and customer products
within, our major markets:
Industrial'' Our industrial market includes the following areas:
Industrial Process Automation'' Our industrial process automation market includes
applications such as factory automation systems, automatic process control systems,
robotics, environmental control systems and automatic test equipment. These
products generally require ICs that offer performance greater than that available
from commodity-level ICs, but generally do not have production volumes that
warrant custom or application-specific ICs. Combinations of analog mixed-signal
and DSP ICs are usually employed to achieve the necessary functionality. Automatic
test equipment applications have created opportunities for the design of system-level
ICs that require a high level of electronic circuitry.
Instrumentation'' Our instrumentation market includes engineering, medical
and scientific instruments. These products are usually designed using the highest
performance analog and mixed-signal ICs available. Customer products include
oscilloscopes, logic analyzers, CAT scanners, MRI equipment, blood analyzers
and microscopes.
Defense/Aerospace'' The defense, commercial avionics and space markets all
require high-performance ICs that meet rigorous environmental and reliability
specifications. Many of our analog ICs can be supplied in versions that meet
these standards. In addition, many products can be supplied to meet the standards
required for broadcast satellites and other commercial space applications. Most
of our products sold in this market are specifically-tested versions of products
derived from our standard product offering. Customer products include navigation
systems, flight simulators, radar systems and security devices.
Automotive'' Although the automotive market has historically been served with
low-cost, low-performance ICs, demand has emerged for higher performance devices
for a wide range of safety and entertainment applications. In response, we are
developing products specifically for the automotive market. We supply a micromachined
IC used as a crash sensor in airbag systems. We believe that other micromachined
devices derived from this product may be suitable for other automotive applications,
such as roll-over sensing, global positioning satellite, or GPS, automotive
navigation systems, anti-lock brakes and 'smart' suspension systems. In addition,
our analog and DSP ICs have application in engine control, in-cabin electronics,
and collision avoidance systems.
Communications'' The development of broadband, wireless and Internet infrastructures
around the world has created an important market for our communications products.
Communications technology involves the acquisition of analog signals that are
converted from analog to digital and digital to analog form during the process
of transmitting and receiving data. The need for higher speed and reduced power
consumption, coupled with more reliable, bandwidth-efficient communications,
has been creating demand for our products. Our products are used in the full
spectrum of signal processing for audio, data, image and video communication.
In wireless and broadband communication applications, our products are incorporated
into cellular telephones, cellular base station equipment, modems, pagers, PBX
switches, routers and remote access servers.
Computers and Computer Peripherals'' Increased interface between users and
PCs through monitors, printers, scanners and audio devices and the increasing
need for power and thermal management capability in PCs have provided opportunities
in the computer market. The computer industry seeks to develop and market ever
smaller and lighter personal computers. This need increases demand for high-performance
ICs that monitor power usage, enabling manufacturers to use smaller batteries
and extend battery life between charges. In addition, we currently supply a
variety of ICs used in this market for functions such as graphic displays, interfaces
between PCs and peripherals such as LCD monitors and projectors, and enhanced
audio input and output capability for business and entertainment applications.
Consumer Electronics'' Increased market demand for digital entertainment systems
for acquisition, display and digital processing of signals has allowed us to
combine analog and digital design capability to provide solutions that are designed
to meet the rigorous cost, size and reliability constraints of the consumer
electronics market. The emergence of high-performance, feature-rich consumer
products, such as digital camcorders and cameras, home theater systems, advanced
digital televisions, video projectors and DVD recorders/players, has led to
the need for high-performance, system-level ICs with a high level of specific
functionality.
Production and Raw Materials
Monolithic integrated circuit components are manufactured in a sequence of
semiconductor production steps that include wafer fabrication, wafer testing,
cutting the wafer into individual 'chips,' or dice, assembly of the dice into
packages and electrical testing of the devices in final packaged form. The raw
materials used to manufacture these devices include silicon wafers, processing
chemicals (including liquefied gases), precious metals, ceramic and plastic
used for packaging.
We develop and employ a wide variety of proprietary processes that are specifically
tailored for use in fabricating high-performance linear, mixed-signal and MEMS
ICs. We also use bipolar and CMOS wafer fabrication processes.
Our IC products are fabricated both at our production facilities and by third-party
wafer fabricators. Most of our analog products are manufactured in our own wafer
fabrication facilities using proprietary processes. Our DSP products, and a
portion of our analog products, are manufactured at third-party wafer-fabrication
foundries using sub-micron digital CMOS processes. We operate wafer fabrication
facilities in Wilmington and Cambridge, Massachusetts; Sunnyvale, California
and Limerick, Ireland. We also operate assembly and test facilities located
in the Philippines and use third-party subcontractors.
Our products require a wide variety of components and raw materials, most of
which we purchase from third-party suppliers. We have multiple sources for the
majority of the components and materials we purchase and incorporate into our
products. However, in some cases, we purchase components from sole-source suppliers,
such as external foundries. If these sole-source suppliers are unable or unwilling
to manufacture and deliver sufficient quantities of components to us on the
time schedule and of the quality that we require, we may be forced to engage
additional or replacement suppliers, which could result in additional expenses
and delays in product development or shipment of product to our customers. Although
we have experienced shortages of components from time to time, these items have
generally been available to us as needed.
Competition
We compete with a number of semiconductor companies in markets that are highly
competitive. We believe we are one of the largest suppliers of high-performance
analog and mixed-signal processing components. Competitors for our analog and
DSP products include Cirrus Logic Inc., Linear Technology Corporation, Maxim
Integrated Products, Inc., National Semiconductor Corporation, Phillips Semiconductor,
ST Microelectronics and Texas Instruments, Inc. Sales of our micromachined products
are currently comprised of acceleration sensors and gyroscopes, and our main
competitors in that market are Bosch, Freescale Semiconductor, Inc., Denso Corporation
and ST Microelectronics.
We believe that competitive performance in the marketplace for real-world signal
processing components depends upon several factors, including technical innovation,
product quality and reliability, range of products, product price, customer
service and technical support. We believe our technical innovation emphasizing
product performance and reliability, supported by our commitment to strong customer
service and technical support, enables us to compete in our chosen markets against
both foreign and domestic semiconductor manufacturers.
Many other companies offer products that compete with our products, and some
have greater financial, manufacturing, technical and marketing resources than
we have. Additionally, some formerly-independent competitors have been purchased
by larger companies. Our competitors also include emerging companies selling
specialized products to markets we serve. There can be no assurances that we
will be able to compete successfully in the future against existing or new competitors,
or that our operating results will not be adversely affected by increased price
competition.