Q: Dialog Semiconductor experienced exceptional growth in 2008 (increasing 86 percent YoY) when many companies fell short. What business strategies enabled Dialog to remain profitable throughout 2008, and what factors allow the company to be optimistic about revived growth?
A: Dialog experienced significant growth last year and will continue to do so because of three main factors. First, we are responding to customers’ needs better than our competitors, particularly in our focus growth areas of smartphones and portable media players. By developing products with the highest levels of mixed-signal functional integration for power management with the lowest power consumption, we are responding to their needs to develop smaller products that enable longer battery life. Secondly, we are large enough to be seen as a credible player by Tier 1 companies that develop mobile devices, but small enough to remain agile and responsive; once a product specification is agreed, we bring it to market very quickly. Finally, we are still a relatively young player in this industry, so we have huge growth potential.
Q: In the past, to sustain its competitiveness in the global semiconductor industry, the European chip industry relied on government support; however, with a number of other industries requesting assistance, the European government is not investing the same amount of money into the semiconductor industry as before. Therefore, what precautions can semiconductor companies take to ensure that innovation continues and market share is not lost? How can Europe reestablish its competitiveness?
A: I believe that local government investment is not the most important factor in revitalizing Europe’s semiconductor industry. Regardless of location, thoroughly understanding the needs of customers and swiftly and effectively responding to their needs is the catalyst for semiconductor companies to achieve great success. At the same time, companies need to review where their core competencies lie and divest those that add no value. For example, Dialog outsourced manufacturing because it was not a source of competitive advantage.
Europe’s industry experience and engineering expertise, particularly in analog/mixed-signal design, give Europe a competitive advantage. Dialog continues to recruit European talent, and we invest in selected locations to attract the best employees for our company.
Q: Analog/mixed-signal design is still more art than science. What are EU chip manufacturers, universities, research consortiums, etc. doing to advance analog/mixed-signal technologies, such as what has been achieved in the digital arena, i.e. chip design at leading-edge technology nodes? What can the ecosystem learn from the digital experience?
A: Europe’s universities are producing many talented, young engineers in the analog/mixed-signal area, and companies are hiring them for their unique skill set. Dialog currently partners with many of these leading universities. Additionally, GSA’s Analog/Mixed-Signal Interest Group has brought together many key players in analog/mixed-signal design, electronic design automation (EDA), manufacturing and test to examine the industry’s challenges and develop solutions.
It is important not to confuse digital and analog/mixed-signal design with respect to leading-edge technology nodes. Analog/mixed-signal will always lag in this respect due to fundamental physical effects that make analog signal processing very difficult at smaller nodes. This does not mean that it is not advanced analog design. It is just not done at 45-nanometer. The lessons taken from the digital experience are not related to sub-micron manufacturing, but include how to be more effective in design re-use and how to develop standards for interfaces.
Q: The rapid increase of low-power electronics is offering various possibilities in energy harvesting technologies. As a company that largely focuses on power management solutions for mobile devices, is Dialog pursuing the potential of battery-less devices?
A: Despite the hype, energy harvesting is still far from replacing batteries in most applications. Battery-less energy sources come in two basic forms. First, there are sources that deliver low levels of energy over a sustained period, but rarely under all environmental conditions (e.g., solar panels or wind-powered turbines). Second, there are sources that produce short bursts of energy (e.g., piezoelectric elements). Unfortunately, most electronic systems require energy at different times or over longer periods than energy harvesting sources can supply. Therefore, batteries and capacitors are going to be available for a long time to provide load balancing in these systems. Dialog’s focus will be on reducing power consumption through system-level power management, thereby reducing the capacity of the batteries or size of capacitors that are needed for energy storage.
Q: According to a recent study, the battery life of next-generation cell phones is not keeping up with the latest features such as Web browsing and social networking. What solutions from Dialog can aid in bridging the cell phone energy gap? Do you see your original equipment manufacturing (OEM) customers using power as a value proposition or focusing more on features?
A: Power management ICs introduced by Dialog within the past two years have typically replaced discrete power management architectures. The use of these ICs has resulted in power efficiency gains of 40 percent to 60 percent in mobile applications, as well as accompanying cost reductions and other performance enhancements. The ability to keep up with the latest features will depend on how many features mobile device makers want to cram in their products. However, we are definitely making huge strides in extending cell phone battery life.
Our OEM customers are absolutely using power as a value proposition, translating into longer battery life for the end user of their devices.
Q: There has been the argument that field-programmable gate arrays (FPGAs) are displacing application-specific ICs (ASICs). What advantages do Dialog’s mixed-signal ASICs have over a FPGA?
A: As you said in a previous question, analog/mixed-signal design is more art than science, so it is not an easy skill to learn. FPGAs are primarily digital devices in low geometries, so chipmakers have limited success when attempting to add a little bit of analog functionality to FPGAs. It is much easier to add digital functionality to a proven analog design. Dialog can develop a mixed-signal ASIC much faster than a FPGA company can add custom analog functionality to their digital devices. With ASIC-based solutions, Dialog offers a huge time-to-market advantage and higher levels of functional integration, without the cost burden associated with FPGA-based solutions.
Q: Dialog recently concentrated its efforts in the emerging electronic paper display market through a strategic partnership with E-Ink. How do Dialog’s solutions support electronic paper displays?
A: Once again, power management is at the heart of our offering with respect to electronic paper displays. The great advantage of electronic paper is that it consumes no power when it’s static. Dialog provides highly integrated segment drivers for 24 to 192 segments. Once the display data is received, the driver goes into power-down or standby mode while the image is retained on screen. We’re also able to supply devices in bare-die formats so that they can be put into smart cards, memory cards and other applications with restricted space.
Q: As a result of the credit crisis, Gartner reports that consumers are purchasing cheaper cars with little semiconductor content. Therefore, will the automotive market continue to play a strong role in the company?
A: The automotive sector is going through a tough time; however, it is clear that government action, particularly in Germany, is stimulating new demand and there are already signs of recovery. The automotive segment is still an integral part of Dialog (represents about 10 percent of Dialog’s business), and we continue to develop products for this market. As the power-saving technology we have developed for our wireless segment begins to become more important in automotive applications, such as vehicle infotainment, we see an expanding role for our automotive business.
Q: While the fabless industry cut orders to foundries in the first quarter, the foundry industry is expected to rebound in Q2. However, what do you attribute this surge to—an increase in actual consumer demand or to only build-up inventory? Do you believe this rebound will be short lived, or can we continue to expect an increase in orders from fabless companies?
A: Throughout the industry’s supply chain, companies are much smarter with inventory management than in past downturns, so I do not believe an inventory build-up is purely responsible for the predicted rebound. I predict consumer demand will show some recovery during the second half of this year.
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