TI looks to reap investment rewards
When times are tough it is time for investment is the message coming out of Texas Instruments in Europe. Investment in products and solutions, capacity, research and resources.
Tony Astley (right), who is director business operations Europe for Texas Instruments Deutschland GmbH in a role that encompasses what could be described as the unglamorous, but nevertheless essential, ‘back office’ functions, provided an overview on how TI is investing.
"We have been investing in products through organic development and also through acquisitions like Luminary and its Stellaris line of 32-bit MCUs. This has catapulted our product portfolio for the embedded processing space from 150 last year to more than 450 next year," said Astley. TI has already launched another 29 since this acquisition.
While it has been suggested that TI could have developed a similar 32-bit MCU line internally, Astley believes the Luminary acquisition also provided "additional intelligence on how customers use 32-bit microcontrollers as well as the development kits that allow them to be up and running out of the box and writing code in a few minutes."
This acquisition of knowledge is consistent with TI’s aim to be more local and closer to the customer. "It more that just silicon today it is also development kits, support, its access to manufacturing, financial strength and software libraries. Its all of this not just the devices themselves. It is the knowledge of what the customers really value," said Astley.
The Luminary acquisition in May 2009 followed another smaller buy in February 2009 when five-year-old CICLON Semiconductor Device Corp. (Bethlehem, Penn.) became part of TI. "This gave us another step function improvement in the power management solutions area based on high efficient FET technology," said Astley. It provide TI with opportunities in power design in servers, industrial, high-end computing and portable equipment. Nearly a year earlier the company has also boosted its power portfolio when buying Commergy Technologies Ltd. (Dublin, Ireland), a power supply reference design provider that specializes in energy efficient and compact architectures.
As part of its investment in capacity in September TI submitted a bid of $172.5 million for the semiconductor manufacturing equipment from Qimonda‘s factory in Virginia. The 200mm equipment is going in to four existing fabs while the 300mm equipment is to be installed in to its Richardson fab. "This will be the first 300mm analog manufacturing line. Dedicating 300mm wafers to analog gives us a real competitive cost performance/ratio advantage," said Astley. "This line is due to be up and running by the fourth quarter of 2010." In the initial phase, Richardson is expected to support about a billion dollars per year of incremental capacity for TI when fully operational.
To address bottlenecks in assembly/test it has also opened a 800,000-square-foot assembly/test facility ahead of schedule in the Philippines with over 400 additional testers are being installed in other facilities.
To back up this capital investment sales need to continue recent improvements. "In both the western and eastern Europe we have been investing in both sales and technical support," said Astley.
"The widening breadth of product portfolio requires extra support. Around three years ago we had 15 sales offices around Europe, today we have 39 with three more planned including Dubai, Kiev (Ukraine) and Ekaterinburg (Russia)." In Germany the number of sales offices doubled/almost tripled during that time. In Eastern Europe, TI was not represented with a sales office three years ago but it identified many smaller and medium-size customers, who need on-site consultancy and native language speaking contacts.
So with more widely distributed TI staff on the ground where does distribution fit in?
"While distributors add a lot of value in terms of relationships with customers, TI’s approach of increasingly providing systems solutions, say an embedded processor with a data converter plus power management, means that the distributors and TI working together give the customer the advantage of logistics as well as direct support," said Astley. "We have moved away from having a centralized technical support structure, today we have both localized sales and support working hand-in-hand with the distributor."
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