TI’s Experience for Analog IC Companies

Bing Xie, vice president and deputy manager worldwide at Texas Instruments (TI) gives suggestions in interview by Global Sources.

 

Sun Changxu: Is there any difference between analog IC and digital IC in business model and competitive landscape?

 

Xie: Analog and digital have an essential difference-analog is omnipresent; but the average value of each chip is low. For digital IC companies such application processor companies, they usually posts to “establish strategic cooperation with customers”.

 

By contrast, personally, analog corporate uses quieter way. If you do well in support of technology, business, quality management and production capacity, customers would show their interest and know you from small things, slowly coming to accept you. There is a word called ‘pervasive’, once they accept you, you find opportunities everywhere in their entire board. This is what we do in our transformation.

 

Of course, akin to digital IC companies, analog IC also needs support of scale. From technique, scale and technology, TI has stronger advantage than the second and third globally.

 

Sun: Despite hundreds of participants in global analog IC industry, the real player is just a few. Do emerging companies have opportunity to enter the Top 5?

 

Xie: In my opinion, there are still opportunities. Different from digital IC-the beach-goers are often winners, in analog IC world, it’s not enough to top in one product; two products can be said to be not bad. However, if wanting to be a sizable analog IC company, the player should work at dozens of products, because for any one application, such as the large-volume cellphone, the volume is one-off, upgrading brings zero shipments.

 

For Instance, backlight IC is seeing sharp price cutting. Facing such situation, suppose we have good results this year; and do our best to double shipments next year, the sales may not go up any more. So for analog IC, you can’t bet on one type or two; you may need a complete series, this moment you need add investment on manufacturing, R & D, marketing, supporting users and so on.

 

Sun: How do you view the price war in Chinese market?

Xie: Price war is just a means, but not purpose. In fact, we involve in price war sometimes; even we had aggressive strategies, but they were phrased approaches, which came into halt or adjustment when strategic goal was achieved.

 

Price war should have a limitation; if it is at the cost of itself, the strategy can not last long, since there are always rivals. Therefore, from this point of view, analog IC companies should be competitive in technology, business model, support model, customer relations; pay attention to accurate understanding of user applications.

 

Sun: In the next five years, what new fields will TI focus on?

Xie: TI has a goal - Get TI Stronger, let TI stronger. This includes technical and financial aspect as well as relationship with user and our growth.

 

Worth noting, in the analog IC area, we wish greater shares in industrial and automotive market, for these two fields has high CAGP and market space; meanwhile, we have wide production line which can better meet customer needs.

 

Currently, TI is the largest semiconductor supplier in the industrial area; but proportion is still low. So we hope larger shares in the coming years. A task for my tour to Dallas was to study the market. As for automotive, it is expected that China's auto market will grow by 21%; U.S. market comes to 15%, so TI will invest a lot, larger than before.