Maxim tips ICs as it unveils the ‘new Maxim’
9/30/2010 10:08 PM EDT
Analog chip maker Maxim Integrated Products Inc. unveiled what it called ”the new Maxim’’ or ”Maxim 2.0.” SUNNYVALE, Calif. – During an event here this week, analog chip maker Maxim Integrated Products Inc. unveiled what it called ”the new Maxim’’ or ”Maxim 2.0.”
Actually, ”Maxim 2.0,’’ the company’s business strategy, was set in motion back in 2000 and expanded in 2007. As part of the evolving and ongoing plan, the analog chip maker has remade the company-and shaken up the corporate culture.
It has expanded its product focus, reduced chip and process development times, embraced foundries and is on an acquisition spree. At the event this week, in which the company had a breathtaking 24 separate presentations over a four-and-a-half hour span, Sunnyvale-based Maxim not only discussed its strategy, but it also tipped a number of new products.
The company is quietly devising a range of devices, including a new battery management device for electric cars, a Class D audio amplifier, a MEMs oscillator and a power line communications device.
Tunc Doluca , president and chief executive of Maxim, said the company follows what it calls a ”balanced business model,’’ in which the chip maker continues to expand beyond its industrial analog roots and invests in new, high-growth markets.
Maxim-which has bought six companies in the last three years-continues to look for acquisitions that are ”adjacent’’ or fit within the company’s product strategy, Doluca said during an interview after the presentations.
On the business front, he remains upbeat despite signs of a slowdown in the IC market. The company is seeing ”some weakness’’ in the PC and LCD segments, but the rest of company’s markets ”look robust,’’ he told EE Times.
But it has been a roller coaster ride for Maxim and its analog rivals. 2009 was a down year for the steady analog market. But then, in early 2010 or so, the analog crowd, including Maxim, saw a surge in demand and experienced shortages and long lead times.
Now, there are signs of an IC lull. ”We believe we are past the fifth inning of a preannouncement window with a few more candidates lowering their guidance into the end of September,’’ said Vernon Essi, an analyst with Needham & Co. LLC, in a recent report. ”Specifically, we believe Maxim, Intersil and O2Micro are likely candidates to preannounce given their high concentration of revenue exposure to computing and consumer.’’
Analog is ”holding steady’’ despite the lull, said Susie Inouye, an analyst at Databeans Inc., but “obviously, the third quarter is softer.’’ The IC market is projected to grow 24 percent in 2010, she said. Of that, the analog market is expected to grow 30 percent this year, she added.
Another challenge for Maxim and others is how vendors will react to Texas Instrument Inc., which recently open the world’s first 300-mm analog fab. ”TI is bringing on lots of 300-mm and other capacity, driving low cost advantages to hit the likes of National, Maxim, ADI, Intersil, and to a lesser extent, Linear,’’ said Craig Berger, an analyst with FBR.
Beyond its industrial roots
In any case, Maxim is considered among the ‘’big five’’ in analog. In the analog rankings, TI was in first place in terms of sales in 2009, with $2.436 billion in revenues, followed in order by ADI ($1.69 billion), National ($1.098 billion); Maxim ($1.037 billion) and Linear ($894 million), according to Databeans.
The company was co-founded in 1983 by legendary chip executive John (Jack) Gifford. (In 2009, Gifford died from an apparent heart attack.) Shortly after its inception, Maxim entered into its first growth phase, focusing mainly on the exploding industrial analog market. The company went public in 1988.
In 2000, the company started what it considers as its second phase of growth. In 2001, it acquired Dallas Semiconductor. Maxim also ”expanded its focus’’ by moving into new markets, Doluca said.
The company’s efforts were somewhat sidetracked in the mid-2000s. In late 2006, with the company mired in a probe of historical stock option grants, Maxim announced that Gifford retired on the advice of his doctor due to health concerns.
Gifford served as the company’s CEO until his retirement in 2007. At that time, Doluca became president and CEO. Doluca joined Maxim in 1984 as a member of technical staff.
With Doluca at the helm, Maxim accelerated its strategy. Some time ago, the company expanded into the communications, computing and consumer fronts. Within those areas, it focuses on seven markets: mobility, consumer, energy, security, high definition video, automotive and health.
Today, the company sells 6,400 chips in 28 different product areas. As of June 26, it employed approximately 9,200 people, according to a filing.
Maxim has moved beyond its industrial roots. ”They are a powerhouse in analog and mixed-signal chips, and have a good reputation in converters and power management chips,’’ said Will Strauss, president of Forward Concepts Co.
That’s only part of the story. Observers believe Maxim was more of a reticent, autocratic organization in the past. After being named to the top post at Maxim, Doluca had different ideas. ”I wanted to change the culture,’’ he said. Company management has become ”more accountable’’ and ‘’more responsible.’’
In a presentation, the CEO also listed several recent milestones in its ongoing makeover: 1) patent applications shot up 50 percent in two years; 2) product development times were shortened 20 percent in two years; 3) a 180-nm BCD process was developed in record time; 4) a 300-mm sourcing capability was added; 5) it completed six acquisitions in three years; and 6) it aligned R&D teams with end-markets.
Expects record quarter
The strategy seems to be working. The analog chip maker expects to see another ”record quarter,’’ Doluca said during the presentation. Sales are projected to range from $600-to-$630 million in its first fiscal quarter, he said. According to Yahoo Finance, Maxim is projected to earn $0.37 a share on sales of $614.54 million for the quarter.
Maxim recently reported record sales of $566 million for the previous quarter ended June 26, up 11 percent compared with the previous quarter and up 43 percent compared with the year-ago quarter. The company posted a net income of $58.5 million, compared to a net loss of $33.9 million in the prior quarter and a net income of $8 million in the year ago quarter.
In that quarter, ”Maxim saw strength in its handset (smartphone) programs and across industrial customers, while noting a notebook PC chip slowdown with 3Q sales likely to fall quarter-over-quarter,’’ Berger said in a recent report. ”Maxim is likely gaining handset analog share at Samsung, LG, and Nokia with its integrated analog baseband, likely at the expense of National.’’
The overall demand picture is mixed right now. Europe is weak, but Asia is strong. It’s a mixed bag in the U.S. The wireless infrastructure build-out is strong in China, India, and, surprisingly the U.S., Doluca said.
During the most recent quarter, Maxim revealed it had struck a 300-mm foundry alliance with Taiwan DRAM maker Powerchip Semiconductor Corp. Maxim is qualifying a 180-nm BCD process within Powerchip’s 300-mm fab, according to Needham & Co.
Maxim does most of its manufacturing in-house, although it has foundry relationships with Seiko Epson, TSMC and another undisclosed vendor.
Three years ago, Maxim had less than 5 percent of its IC output handled by the foundries. Today, some 30 percent of Maxim’s overall chip output is done by foundries, as a means to cut costs. ”That number is going to grow,’’ Doluca said.
Like all analog houses, Maxim prides itself by devising its own processes. The company has some 100 variations of its own process technologies in-house, ranging from bipolar, BCD and silicon-germanium, said Pirooz Parvarandeh, group president and chief technology officer at Maxim.
Meanwhile, the CEO also took issue that TI will change the game by opening the world’s first 300-mm analog fab. He said Maxim has been working with Powerchip-long before TI made its 300-mm announcement.
”Maxim is now qualifying 300-mm analog parts with manufacturing partner Powerchip, which management suggests will lower fab unit costs by 20–30 percent, and overall unit costs by 10–15 percent,’’ Berger said.
”Maxim’s stated objective is not to reduce end product prices, but rather to increase gross margins on high volume parts. If these parts meet quality standards, they will be treated as ‘risk’ parts that can be shipped to end customers,’’ the analyst said. ”It is conceivable that high-volume production on this fab can ramp later this year or in early 2011, thereby allowing Maxim to keep better pace with demand and match TI’s 300-mm manufacturing claims.’’
On an acquisition spree
Besides expanding its foundry strategy, Maxim has been on an acquisition spree. ”We’re not done’’ with the acquisition strategy, the Maxim CEO said. ”From an outsider, (the acquisitions appear) to be random. They are actually pieces in a puzzle.’’
In 2008, Maxim acquired Mobilygen Inc., a developer of H.264 video compression chips. In 2009, Maxim acquired Innova Card, a fabless company specializing in the development of secure solutions for terminals. Also in 2009, Maxim acquired Zilog Inc.’s secure transaction product line.
Last year, Maxim sold some RFID intellectual-property (IP) to Intelleflex Corp. In return, Maxim received an equity position in Intelleflex, a developer of RFID products. Maxim recently acquired Teridian Semiconductor Corp. for $315 million. The acquisition positions Maxim in the smart meter chip market. And Maxim recently acquired Phyworks Ltd. for approximately $72.5 million in cash.
Not to be outdone, Maxim continues to expand its own organic lines. During the presentation, the company tipped a dizzying array of products and technologies.
On the energy front, Maxim talked about the following parts or systems:
Maxim will unveil its fourth-generation platform for smart meters in November.
It has devised battery management devices for electric vehicles, including a newer part called the MAX17830. The 12-channel device includes an analog-front-end with a driver for external cell balancing. (Maxim recently rolled out the MAX11068, a high-voltage, 12-cell, battery-monitoring IC for hybrid vehicles and electric vehicles. This solution employs a proprietary SMBus-laddered communication bus that allows multiple MAX11068s to be daisy chained together without expensive isolators.)
It is readying a new power line communications (PLC) device. The product, dubbed G3-Lite, is a new version of its G3 line of PLC devices. Maxim’s PLC solutions provide secure, robust data networks using existing power lines. G3-Lite is an OFDM-based narrowband PLC device. The device includes two chips, including a baseband and an analog front-end. It is said to handle 100-kbps in the 10-490kHz band.
On the consumer front, Maxim tipped the following devices:
It is readying a new Class D audio amp, dubbed the MAX13300/1/2. It provides the efficiency at one-third the power. The 4-channel device makes use of spread spectrum technology for lower EMI. ”The automotive guys have been looking for Class D’’ with low EMI, Parvarandeh said in an interview.
Calling a game changer, Maxim is rolling out a MEMS-based real-time clock. The DS3231S integrates crystal and oscillator/compensation circuits. It reduces crystal oscillator variation to less than ±3.5PPM (110 sec/year) over -40º to +85ºC. ”The significance of MEMS is its robustness and compatibility with semiconductor processes,’’ Parvarandeh said.
Maxim talked about the recently-introduced MAX11836, a TacTouch haptic actuator controller for touch-enabled devices. The MAX11836 adds drive/sense circuitry for connecting up to four external force-sense resistors (FSRs) to measure touch pressure.
On the industrial front, Maxim talked about the MAX2070, a new ADC for ultrasound systems. Recently it rolled out the MAX19527, an ultra-low-power, 12-bit, 50Msps ADC optimized for portable ultrasound systems. Integrating 8-channels on a single chip, this ADC operates from a single 1.8V supply and consumes only 55mW per channel.