March 21, 2005
Analog
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Jack Horgan - Contributing Editor


by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!


In April 1999, Infineon Technologies AG was formed as a separate legal entity and a directly and indirectly wholly owned subsidiary of Siemens AG. Prior to that date, they were the Siemens Semiconductor Group. As such, they have been actively involved in the development, manufacture and marketing of semiconductors since 1952. In March 2000, as part of an initial public offering, Siemens' affiliate, Siemens Nederland N.V., sold approximately 173 million of our shares. Since that time, Siemens and its affiliates have taken a number of steps to substantially reduce their ownership interest in our company. Siemens continues to control the disposition of approximately 18 percent of the
firm. Infineon has a total of approximately 35,570 employees. They create and fulfill the majority of their net sales directly, though they increasingly make sales through a global network of distributors and partners in the Electronic Manufacturing Services (EMS) segment.


Infineon designs, develops, manufactures and markets a broad range of semiconductors and complete systems solutions used in a wide variety of microelectronic applications, including computer systems, telecommunications systems, consumer goods, automotive products, industrial automation and control systems, and chip card applications. Their products include standard commodity components, full-custom devices, semi-custom devices, and application-specific components for memory, analog, digital, and mixed-signal applications.


Infineon's business is organized into four principal operating segments serving various markets in the semiconductor industry: Wireline Communications, Secure Mobile Solutions, Automotive & Industrial, and Memory Products. In 2004 these segments accounted for 6%, 25%, 25%, and 41% respectively plus 3% others.


The table below shows the financials for the last five years. Revenues are 26% from 2001 to 2002 and 17% from 2003 to 2004.
For 2003 Infineon claims to be number 2 in Automotive with an 8.7% share of $13.1B market and number 1 in power with an 8.1% share of a $9.4B market.
North America and Germany as a percentage of total revenue each dropped 3% from 2001 to 2004.


In April 2004, Infineon acquired the Taiwanese chip designer ADMtek Inc., Hsinchu, Taiwan (''ADMtek''). ADMtek will offer a complete IC solution package, to complete our portfolio of broadband access products for the central office with feature-rich, multimedia gateway solutions for customer premise equipment. Also in 2004 the firm agreed to sell their fiber optics business unit (part of our Wireline Communications segment) to Finisar Corporation.


Infineon and Rambus have been in the press repeatedly due to a long standing battle of alleged patent infringement related to memory products.


Separately Infineon entered into a plea agreement with the Antitrust Division of the U.S. Department of Justice in connection with its ongoing investigation of alleged antitrust violations in the DRAM industry. Under terms of the agreement the firm agreed to pay a fine of $160 million.


Texas Instruments makes, markets and sells high-technology components to more than 30,000 customers. TI has three separate business segments: 1) Semiconductor; 2) Sensors & Controls; and 3) Educational & Productivity Solutions. Semiconductor is by far the largest of these business segments. It accounted for over 85 percent of revenue in 2004, and historically it averages a higher growth rate than the other two business segments, although the semiconductor market is characterized by wide swings in growth rates from year to year. TI was the world's third-largest semiconductor company in 2004 in terms of revenue, according to Gartner. In 2004 Sensors & Controls accounted for 9% of
revenue and E&PS 4%.


TI's analog semiconductors consist of custom products and standard products. Custom products are designed for specific applications for specific customers. Standard products include application-specific standard products and high-performance standard catalog products. These standard products are characterized by differentiated features and specifications, as well as relatively high margins. Many standard analog products tend to have long life spans. Both custom and standard products are proprietary and difficult for competitors to imitate. Analog products also include commodity products, which are sold in high volume and into a broad range of applications, and generally are differentiated
by price and availability.


TI owns and operates semiconductor manufacturing sites in the Americas, Japan, Europe and Asia.


As part of our manufacturing strategy, TI outsources a portion of product manufacturing to outside suppliers (foundries and assembly/test subcontractors), which reduces the amount of capital expenditures and subsequent depreciation required to meet customer demands, as well as fluctuations in profit margins. Outside foundries provided about 20 percent of TI's total capacity needs in 2004.
Semiconductor revenue of $10,941 million increased 31 percent from 2003, due to increased shipments resulting from broad-based demand, led by 40 percent growth in wireless revenue, 40 percent growth in high-performance analog revenue and 79 percent growth in DLP product revenue. Revenue from analog products and DSPs represents 75 percent of total Semiconductor revenue for both 2004 and 2003.


The company's analog revenue grew 28 percent due to higher shipments as a result of growth in demand for high-performance analog products and wireless products. About 40 percent of Semiconductor revenue came from analog products. Revenue from high-performance analog products, a subset of total analog, grew 40 percent despite inventory reductions that affected demand in the second half of the year, especially for products sold through distribution channels. By sharply reducing factory loadings, TI was able to finish the year with internal inventory at desired levels.


Using new, proprietary manufacturing processes, TI is creating high-performance analog products with performance and power-consumption characteristics that are differentiating TI from competitors. The company introduced about 400 new high-performance analog products in 2004. Despite the long product life cycles intrinsic in this market, about half of TI's high-performance analog revenue came from products introduced in the last few years. This indicates the market's positive response to TI's rise as an innovative and reliable high-performance analog supplier.


Among significant developments, TI introduced a new Impedance Track technology for “gas-gauge” chipsets. This technology calculates a device's remaining power with up to 99 percent accuracy throughout a battery's total life cycle. A digital still camera, for example, could use this technology to display the number of pictures that can be taken with the remaining battery charge.


Koninklijke Philips Electronics N.V. (the “Company” or “Royal Philips Electronics”) is the parent company of Philips. The activities of the Philips group are organized in 6 operating product divisions, each of which is responsible for the management of its business worldwide, being Lighting, Consumer Electronics, Domestic Appliances and Personal Care, Semiconductors, Medical Systems and Miscellaneous. At the end of 2004, Philips had approximately 140 production sites in 32 countries and sales and service outlets in approximately 150 countries, and employed about 162,000 people and recorded sales of EUR 30 billion in 2004.
Revenue from North America as a percent of total revenue has fallen from 15.8% in 2002 to 9.2% in 2004, while revenue from AP has risen from 54.3% to 58.6%. Europe has also picked up 2% of total revenue.


Philips Semiconductors has significant investments in wafer-fabrication ventures: approximately 48% in Systems on Sillicon Manufacturing Company (SSMC) and an additional 6% via Taiwan Semiconductor Manufacturing Company Limited (TSMC), approximately 19% in TSMC, approximately 37% in ASMC and approximately 60% in Jilin, China. In addition, Semiconductors has a 31% share in the aforementioned plant in Crolles, France. The division currently has 20 manufacturing facilities throughout the world, located in Europe, the United States and Asia.


Philips Semiconductors is not active in the memory, microprocessors (MPU) and optoelectronics part of the semiconductor industry


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-- Jack Horgan, EDACafe.com Contributing Editor.


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