Maxim Integrated Products, Inc., designs, develops, manufactures, and markets
a broad range of linear and mixed-signal integrated circuits, commonly referred
to as analog circuits. The Company also provides a range of high-frequency design
processes and capabilities that can be used in custom designs. The analog market
is fragmented and characterized by many diverse applications, a great number of
product variations, and, as to many circuit types, relatively long product life
cycles. Maxim’s objective is to develop and market both proprietary and industry-standard
analog integrated circuits that meet the increasingly stringent quality standards
demanded by customers. Based on product announcements by its competitors, Maxim
believes that in the past 21 years it has developed more products for the analog
market, including proprietary and second-source products, than any of its competitors
over the same period.
The Analog Integrated Circuit Market
All electronic signals fall into one of two categories, linear or digital.
Linear (or analog) signals represent real world phenomena, such as temperature,
pressure, sound, or speed, and are continuously variable over a wide range of
values. Digital signals represent the “ones” and “zeros” of binary arithmetic
and are either on or off.
Three general classes of semiconductor products arise from this partitioning
of signals into linear or digital. There are those, such as memories and microprocessors,
that operate only in the digital domain. There are linear devices such as amplifiers,
references, analog multiplexers, and switches that operate primarily in the
analog domain. Finally, there are mixed-signal devices that combine linear and
digital functions on the same integrated circuit and interface between the analog
and digital worlds. Maxim’s strategy has been to target both the linear and
mixed-signal markets, often collectively referred to as the analog market. In
addition, Maxim has added some Dallas Semiconductor products that are exclusively
or principally digital as well as a significant number of engineers skilled
in digital design and software development. Although the acquisition did not
substantially affect Maxim’s strong focus on the linear and mixed signal market,
it has supplemented Maxim’s capabilities in the digital area in ways that enable
development of new products, mixed signal and other, with very sophisticated
digital characteristics.
The Company believes that, compared to the digital integrated circuit market,
the analog market has generally been characterized by a wider range of standard
products used in smaller quantities by a larger number of customers, and in
many cases, by longer product life cycles and lower capital requirements as
a result of generally using less dense manufacturing technologies. The Company
believes that the widespread application of low-cost microprocessor-based systems
and of digital communication technologies has affected the market for analog
integrated circuits by increasing the need for signal conditioning interfaces
between the digital and analog world.
The analog market is a fragmented group of markets, serving numerous and widely
differing applications for instrumentation, industrial control, data processing,
communications, automotive, consumer, medical imaging, military and video. For
each application, different users may have unique requirements for circuits
with specific resolution, accuracy, linearity, speed, power, and signal amplitude
capability, which results in a high degree of market complexity. Maxim’s products
can be used in a variety of applications, but serve only certain portions of
the total analog market.
Competition
The analog integrated circuit industry is intensely competitive, and virtually
all major semiconductor companies presently compete with, or conceivably could
compete with, some segment of the Company’s business. Maxim’s competitors include,
without limitation, Altera Corporation, Anadigics Inc., Analog Devices, Inc.,
Advanced Analogic Technologies, Inc., Applied Micro Circuits Corporation, Conexant
Systems Inc., Exar Corp., Fairchild Semiconductor Corp., Freescale Semiconductor,
Inc., Infineon Technologies AG, Intel Corporation’s Level One Communications,
Inc. Subsidiary, Intersil Corporation, Linear Technology Corporation, Lucent
Technologies, Micrel Inc., Microchip Technology Inc., Mitsubishi Corporation,
Mitsui & Co. Ltd., Monolithic Power Systems, Inc., Motorola Inc., National
Semiconductor Corporation, ON Semiconductor Corporation, Philips Electronics
N.V., PMC-Sierra Inc., RF Micro Devices Inc., Ricoh Company Ltd., Seiko Corporation,
Semtech Corporation, STMicroelectronics N.V., Silicon Laboratories Inc., Siliconix
Inc., Sipex Corporation, Skyworks Solutions, Inc., Texas Instruments Inc., Vitesse
Semiconductor Corporation, Volterra Semiconductor Corporation, and others, including
start-up companies. Some of Maxim’s competitors have substantially greater financial,
manufacturing, and marketing resources than the Company, and some of Maxim’s
competitors have greater technical resources.
The Company believes it competes favorably with these corporations primarily
on the basis of technical innovation, product definition, quality, price, and
service. There can be no assurance that competitive factors will not adversely
affect the Company’s future business.
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