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Research and Markets: "Diel Report on Intersil: How Intersil Achieves Superior Performance"
Dublin, Oct 22, 2008 (M2 PRESSWIRE via COMTEX) --
Research and Markets (http://www.researchandmarkets.com/research/f115f8/diel_report_on_in) has announced the addition of the "Diel Report on Intersil: How Intersil Achieves Superior Performance" companyprofile to their offering.
The main purpose of this report is to deliver a comprehensive and up-to-date analysis of Intersil and its position on the analog/mixed-signal competitive landscape. The report delivers an in-depth analysis of Intersil s business model and strategy and provides a rich set of business performance data.
Additionally, this report delivers insights into the strategic and competitive implications of Intersils s analog transformation, which is practically completed.
Intersil is a unique analog vendor in terms of its business model and strategy. It is a leader in the power management area, which contributes more than one half of its total revenue. This report provides insights on how the company achieves a superior performance by taking an in-depth look at its strategies, capabilities, and business and technology trends.
This report extends our coverage of leading analog-mixed signal vendors including: TI, National, NXP Semiconductors, Analog Devices, Maxim Integrated Products, and Linear Technology.
This report s contents could be grouped into three major areas:
- Executive Aspects
- Competitive & Business Aspects
- Manufacturing, Products, and Sales Aspects
Executive Summary:
Select Highlights:
- The new Intersil has been built on a strong foundation of Harris Semiconductor s 30-year long technology legacy with deep roots in the military and aerospace business. Intersil legacy resembles the one of National Semiconductor in the approaches to business re-positioning along their original core competencies.
In the case of Intersil these include (1) analog/mixed-signal technologies, and (2) military and satellite business. The legacy analog/mixed-signal core competency includes high-performance analog signal processing, power management, and interface products. A key implication is that the new Intersil has in effect evolved over 35 years as an analog company.
- During the past seven years, the company has reinforced its analog position by divesting of its Discrete Power and Wireless networking businesses, and acquiring Elantec and Xicor.
The company has expanded the FY99 analog/mixed-signal business into the power management domain. As a result of this transformation the operating margin grew from 4% in FY99 to 20% in FY07, while revenue grew from $533M to $757M in the same period. Revenue per employee grew from $318K in FY03 to $507K in FY07, while income per employee grew from $29K to $94K in the same period.
- Intersil s top business model target is growth of revenue (faster than peers) and earnings per share (faster than revenue). These growth objectives mandate a selective approach to presented business opportunities by avoiding to compete for low-margin and/or non-strategic businesses.
In support of the revenue growth objective, a key strategy is to grow market share in vertical accounts and develop new vertical businesses. In order to protect a further margin dilution, the company must commensurately expand the revenue derived from the horizontal market and/or raise value of its products in the vertical market. The target revenue stream profile is a 50/50 split between vertical and horizontal revenues, which is typical for the six leading analog vendors.
- Intersil is unique among the six leading analog vendors in regard to its fab-lite strategy. It internally manufactures a quarter of total produced wafers representing around 36 percent of total sales.
Two primary foundries (IBM and TSMC) manufacture the company s sub-0.6 micron products. A majority of power management products are manufactured by IBM representing around one-half of Intersil s revenue. Secondary foundries include AMIS/ON Semiconductor and UMC, which manufacture sub-1 micron products using standard processes.
- Analog products represent 97% of all Intersil s generic products. Digital products (3% of total) include the select remainders of prior digital product portfolios including function-specific DSP, EEPROM memory and microprocessor/peripheral products. Intersil product arsenal features around 2,400 generic products and an estimated 9,600 model products assuming a proliferation factor of four. A generic product is the basic (unique) part number product typically proliferated through package, temperature/voltage, and/or performance derivatives.
Dominant product classes include: amplifiers (17% of total generic products), interface (29%), switching regulators (12%), switches/ muxes/ crosspoints (9%), digital potentiometers (4%), and power supply support (4%). Six out of 26 product classes represent 75 percent of all generic products, while nearly 50 percent of all generic products are represented by interface and amplifier products.
Eight power management product classes represent 25 percent of all generic products and around 60 percent of Intersil s total revenue since they are mainly derived from vertical PC applications.
- The company s strongest position is in power management (core power, battery chargers, display power), which represents Intersil s core competency. It is followed by optical storage (laser diode drivers), xDSL line drivers, and video (interfaces). The common thread among these areas are standards-based (industry or de facto) products and business strategy. This requires a constant influx of higher value products substituting for the commoditized part of a business, i.e., a recycling strategy.
A significant part of Intersil s revenue comes from standards based end-equipment applications such as interface and core power products. These tend to become commoditized over time and negatively impact the company s overall margins. Intersil counters this trend by steadily introducing new products thereby providing a higher value in the same (or similar) type of end equipment applications. Therefore, the company introduces more new products per unit revenue than its peers, while around 40 percent of its workforce represents R&D engineering.
- Intersil has recently (9/2008) changed its organization orientation from an end-markets focus to an end-equipment application focus. Two new major product groups, Power Management and Analog & Mixed Signal, cover the end equipment s power-signal path space. This indicates Intersil s intent to broaden the scope of its power management business by leveraging its current consumer and computing power core competencies.
These two major product groups are supported by three major centralized organizations: worldwide sales/corporate marketing, operations, and technology group.
- Since the acquisition of Xicor in FY04, Intersil is selectively acquiring smaller companies with values up to $60M range. These acquisitions serve a fill-in products/technology role further reinforcing the company s analog market position. Two recent acquisitions (Planet ATE and D2Audio) are representative acquisition targets.
- Intersil revenue stream profile features two distinct layers: the bottom higher margin/annuity and the lower margin top layer. These revenue layers are derived from general-purpose proprietary and application-specific standard products, respectively. The top layer drives growth while the bottom layer drives profitability.
Together they yield average corporate growth and profit, which is a strong function of the type of business and balance between the two revenue layers. A 50/50 split in revenues between the two layers has been broadly used as the business model target by the leading analog vendors.
The top revenue layer is typically derived from vertical endmarket applications and in the case of Intersil with a focus on computing power applications. The company rides the wave of new processor introductions by Intel and AMD and provides the needed power management solutions.
Key Topics Covered:
- Swot Summary
- Key Findings
- Competitive Position And Differentiators
- Business Performance Data And Trends
- Business Model And Strategy
- Corporate Functions And Modus Operandi
- Manufacturing Environmnet And Trends
- Product Arsenal Profile
- Revenue And Sales Channel Attributes
- List of Figures
For more information visit http://www.researchandmarkets.com/research/f115f8/diel_report_on_in
CONTACT: Laura Wood, Senior Manager, Research and Markets
Fax: +1 646 607 1907 (US)
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e-mail: press@researchandmarkets.com
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