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Amplifiers/Converters  

No way but up for TI's analogue biz

Posted: 02 Apr 2009     Print Version  Bookmark and Share

Keywords:analogue IC  energy management  analogue business  DSP 

EE Times: Being a supplier with a wide range of products in the analogue market has numerous advantages but it also means TI has to devote more resources to R&D, sales and marketing activities to support this?

Lowe: You are absolutely right. We have to do a great job in those sub categories and we actually do a pretty decent job. According to various market analysts, TI is No. 1 or No. 2 in power management, amplifiers, interface and data converters, meaning we've got a pretty decent portfolio in each of those sub categories. We spend a lot of time and energy making sure that our individual components can be competitive with the best in the industry.

When you offer a complete solution it allows the customer to the market faster than when dealing with a single supplier. It also enables TI to basically go deeper into the customer base, in other words, call on more customers and especially smaller customers.

We are able to do this because our broad portfolio makes it economically viable for us to approach small customers earlier in their own development as a company where their semiconductor purchases might be relatively small as an early start up. TI can afford to call on customers like that because we can get a higher percentage of their relatively small semiconductor spend.

The second part of your question is about the cost disadvantage relative to size. I don't see that at all. In fact, we might argue that we have the cost advantage because we can leverage our sales force across a much broader array of products. In terms of developing the products themselves we are very competitive and TI has a long history of manufacturing expertise and improving yields.

Analogue strategy
EE Times: At the corporate level, TI's CEO has talked often about the importance of analogue to the company's future. What exactly does TI expect to do in the analogue area and how does the company hope to get there? In other words, are you planning growth through acquisitions or through internal expansion?

Lowe: We've been working on our analogue strategy now for the last 9 or 10 years and what we've been able to do over that time period is carve out a relatively solid position. TI, I believe by most measures, is the number one player in the analogue business and we also have a solid position in categories like converters, amplifiers, interface and power management.

But while TI is the No. 1 player in analogue, we still have only a market share of 13 per cent. So you have a very large market that is on the order of $35 billion to $36 billion (Rs.1.74 lakh crore to Rs.1.79 lakh crore) where the leading supplier has a relatively small market share. What that means to us is that there is a tremendous growth opportunity for TI.

If we were sitting there with 90 per cent market share, it's difficult to think about gaining the remaining 10 per cent. The analogue market is probably going to consolidate around a couple of strong providers in that space and that is obviously what we intend to do.

Analogue is going to become the primary growth engine of the company. You mentioned earlier that TI's analogue business represents 40 per cent of our total revenue. It's clearly in our sight to drive analogue as a percentage of TI's sales up higher simply because we believe it's a higher growth opportunity for us.

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