Nikkei Electronics Asia -- November 2009
Reports -- Interview
Xilinx: Continuing to Supply Cutting-Edge Products

Xilinx, Inc of the US is the leader in field-programmable gate arrays (FPGA), and despite the global recession achieved about a 15% operating margin in the last quarter. The firm is only about 25 years old, and has had only three chief executive officers (CEO); as each of the first two was in office for over a decade, the company has operated under similar policies for long periods. 

Moshe Gavrielov, who was appointed CEO in Jan 2008, speaks here about where he's leading Xilinx, and about his strategies.

You served as chairman of the Semiconductor Industry Association (SIA) of the US, and in other posts, and it has been about a year now since former CEO Willem P Roelandts tapped you for this position. How has Xilinx changed since then?

It's been a wild year and a half, with the storm-battered electronics industry. I paid special attention to reducing cost, and to getting new technologies and new products to the market as soon as possible. As a result we were able to simultaneously announce the Virtex-6 high-performance, multi-function FPGA made with 40nm technology and the low-priced Spartan-6 45nm FPGA, both in Feb 2009. It was only possible because of the hard work the people in research and development (R&D) put in. Now the most important question will be how the marketing and sales people get products like the Virtex-6 and Spartan-6 to the market. If that goes well I'll be able to tell the R&D team to get started on developing the next generation of products. The sales people did a good job, and I can tell them to make an even better product for the world. That's how I intend to keep the lead in product development. 

Why was it so important to announce new product generations at once for Virtex and Spartan, two major product lines?

There is significant merit in providing our customers with expanded freedom of choice. When they see our new products, they think of what they will be able to accomplish with them. Obviously, we want to provide them with a wide range of possibilities, including the functions and performance that FPGAs can offer. We do that by simultaneously announcing new product generations for both Virtex and Spartan. We accelerated the development of the Spartan-6 in particular to make it possible, but in fact we moved up development plans for both chips.

Other industries, like liquid crystal display (LCD) panels and such, have pretty clearly already hit economic bottom. What's your view on the condition of the FPGA industry?

Let me start with the short-term view, specifically what revenues and profits and such I expect from direct business with our customers right now. There has been a drop in revenues recently, sure, but compared to the average for the semiconductor industry as a whole we began to drop pretty late, only in the fourth quarter of 2008. 

I think we will remain a bit healthier than the overall semiconductor industry. The industry as a whole will show an annual revenue drop of about 25% from 2008, according to industry-wide forecasts. I think our revenue growth rate will exceed the industry average, with revenues dropping about 17% in the first quarter (Jan to Mar) of 2009, from the same quarter of the prior year. 

Profits, on the other hand, remain very healthy in spite of the reduction in revenues. We show investors a cash flow of about US$1.7 billion. Even compared to 2008, we produced US$440 million in cash. Financially we are in great shape.

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