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Microchip Expands into DSC Arena
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Microchip Technology Inc was recently named number one in worldwide 8-bit microcontroller unit (MCU) shipments by industry analyst Gartner Dataquest.
Steve Sanghi, president, CEO and chairman of the board, met with Nikkei Electronics Asia to share his new plan to build a test and assembly facility in China and to expand into the new area of digital signal controllers (DSC).
NEA: What is your business roadmap for Asia-Pacific over the coming years?
Sanghi: Our key market for Asia-Pacific will be China, which in fact is our second largest market in the world now after the US, constituting 13% of our worldwide sales in our fiscal year 2003. Microchip sells into five key market segments worldwide and in Asia - including China - namely the consumer, automotive, industrial, office automation and communication segments. We are currently looking at investing in another test and assembly facility, and China is a possible candidate.
One of our strategies is to localize as much as possible. We have opened up a China Applications Development Center (CADC) and a Translation Resource Center (TRC) in Shanghai this year. The function of the CADC is to create fully manufacturable reference designs for targeted high-volume applications. The role of the TRC is to publish and produce technical documents in the local language format. Both are fully operational now.
We also have a local university program that extends to 85 universities throughout China. The purpose of this is to assist and train the students in microcontrollers and electronics so as to prepare them for their career. Of the 85 universities, seven received scholarships from Microchip in March this year; 36 students and 7 teachers were rewarded for their outstanding efforts.
NEA: What about your product roadmap?
Sanghi: From a product standpoint, we will continue to build upon our number one 8-bit MCU position and expand into the area of DSC and analog. DSC is a new product concept which straddles between a 16-bit MCU and a digital signal processor. It has the power of a 16-bit MCU and DSP, yet it is priced like an MCU. In the field of analog, we have made great strides in the last two years, and to date have more than 340 products in our portfolio. Both fields are of strategic importance to the company, and the Asia-Pacific will be a key consumer of these two products.
NEA: What are some of the driving sectors for your company in China?
Sanghi: For China, the metering and appliances markets are going to be a key focus.
The battery charger market is very important. A lot of different battery chargers are being built for cell phones and other handheld gadgets. The other area is automotive. There is an emerging automotive market, and many US and European automotive manufacturers are now building electronics parts in China. Microchip has a significant amount of business in automotive in the US and Europe. As those customers are coming to China, we also want to develop the market there.
NEA: Where would you like to see your company five years from now?
Sanghi: Our goal is to grow the company at about 25% on average per year. And we certainly hope that we can establish the DSC as a major force in the industry over the next five years. We're also hoping that we'll fill out our Oregon fab, which started production at the end of October, in the next five years.
In five years, hopefully we will have our next investment in China up and running, and going into the second or third phase of operation. We hope we can grow our sales in China from US$80 million (in fiscal year 2003) to US$500 million.
NEA: What is your outlook for the semiconductor industry overall?
Sanghi: As you know, the industry has been in a recession for a few years. It has been the longest recession ever. There is mounting evidence around the world that the industry could be in recovery mode. But nobody really knows how fast that pace of recovery might be. Nobody really accurately forecast how quickly the industry would go into decline, so I'm not sure that anybody can accurately forecast how fast it'll go back up.
by Eleanor Yeung, Hong Kong
(December 2003 Issue, Nikkei Electronics Asia)
Steve Sanghi, president, CEO and chairman of the board, met with Nikkei Electronics Asia to share his new plan to build a test and assembly facility in China and to expand into the new area of digital signal controllers (DSC).
NEA: What is your business roadmap for Asia-Pacific over the coming years?
Sanghi: Our key market for Asia-Pacific will be China, which in fact is our second largest market in the world now after the US, constituting 13% of our worldwide sales in our fiscal year 2003. Microchip sells into five key market segments worldwide and in Asia - including China - namely the consumer, automotive, industrial, office automation and communication segments. We are currently looking at investing in another test and assembly facility, and China is a possible candidate.
One of our strategies is to localize as much as possible. We have opened up a China Applications Development Center (CADC) and a Translation Resource Center (TRC) in Shanghai this year. The function of the CADC is to create fully manufacturable reference designs for targeted high-volume applications. The role of the TRC is to publish and produce technical documents in the local language format. Both are fully operational now.
We also have a local university program that extends to 85 universities throughout China. The purpose of this is to assist and train the students in microcontrollers and electronics so as to prepare them for their career. Of the 85 universities, seven received scholarships from Microchip in March this year; 36 students and 7 teachers were rewarded for their outstanding efforts.
NEA: What about your product roadmap?
Sanghi: From a product standpoint, we will continue to build upon our number one 8-bit MCU position and expand into the area of DSC and analog. DSC is a new product concept which straddles between a 16-bit MCU and a digital signal processor. It has the power of a 16-bit MCU and DSP, yet it is priced like an MCU. In the field of analog, we have made great strides in the last two years, and to date have more than 340 products in our portfolio. Both fields are of strategic importance to the company, and the Asia-Pacific will be a key consumer of these two products.
NEA: What are some of the driving sectors for your company in China?
Sanghi: For China, the metering and appliances markets are going to be a key focus.
The battery charger market is very important. A lot of different battery chargers are being built for cell phones and other handheld gadgets. The other area is automotive. There is an emerging automotive market, and many US and European automotive manufacturers are now building electronics parts in China. Microchip has a significant amount of business in automotive in the US and Europe. As those customers are coming to China, we also want to develop the market there.
NEA: Where would you like to see your company five years from now?
Sanghi: Our goal is to grow the company at about 25% on average per year. And we certainly hope that we can establish the DSC as a major force in the industry over the next five years. We're also hoping that we'll fill out our Oregon fab, which started production at the end of October, in the next five years.
In five years, hopefully we will have our next investment in China up and running, and going into the second or third phase of operation. We hope we can grow our sales in China from US$80 million (in fiscal year 2003) to US$500 million.
NEA: What is your outlook for the semiconductor industry overall?
Sanghi: As you know, the industry has been in a recession for a few years. It has been the longest recession ever. There is mounting evidence around the world that the industry could be in recovery mode. But nobody really knows how fast that pace of recovery might be. Nobody really accurately forecast how quickly the industry would go into decline, so I'm not sure that anybody can accurately forecast how fast it'll go back up.
by Eleanor Yeung, Hong Kong
(December 2003 Issue, Nikkei Electronics Asia)
