Zetex sales steady, aims to boost Asia sales - Embedded.com

Zetex sales steady, aims to boost Asia sales

LONDON — Sales at Zetex plc in the first half of the financial year to June 30 were £32million (about $ 64million) similar to those in the same period last year which were £33.7million (about $67million).

Group operating profit was up to £ 3.2million (about $6.4million) from £ 0.1million (about $0.2million) in 2006 although this was boosted by a number of one-off items which in total contributed a net profit of £ 1.4million (about $ 2.8million) which included the sale in April the sale of its Gem Mill facility to a property developer which provided a £1.9million (about $4million) profit.

“The first half of 2007 has proven to be as challenging as many of us expected,” said Hans Rohrer, CEO of Zetex (Oldham, England) . “In fact the market turned out to be weaker than forecast by most market research companies earlier in the year. The most recent consensus data suggests a reduction of around 8 percent against the second half of 2006. This has been caused by ongoing inventory corrections and slower than expected sales in some of the major end market segments, such as mobile phone and personal computers, amplified by continued pressure on the average selling prices caused by some industry over-capacity.”

“Whilst there is no clear forward consensus, I do believe that the industry will see some moderate growth in the second half as the inventory correction cycle is coming to an end and because demand in the second half historically has been stronger. It is, however, prudent to assume that 2007 is a year of correction with little or no market growth and that demand will pick up towards the end of the year leading to solid growth in 2008,” added Rohrer.

Zetex has a strategic initiative to exploit its portfolio by improving sales in Asia. It has added three distributors in Asia Pacific as well as opening a sales office in Taiwan and will continue to invest in sales resources with a focus on Taiwan, China and Korea.

“Our revenue is Asia is still well below 50 percent whereas our major competitors have high 60 or low 70 percent sales in Asia. There is a gap there that we are going to address aggressively. We are adding distributors, upgrading distributors adding our own resources for design and sales. We are convinced you have to be strong in Asia,” said Rohrer.

Zetex invested £3.3million (about $7million), just over 10 percent of its revenues in R&D with a significant result of this investment was the prototype production of the first silicon of its digital audio chip-set, further increasing the longer term emphasis on smart application specific products and the use of foundry partners. This chip-set will be manufactured partly in Zetex's fabs and partly by a foundry partner.

“This is by far the most complex chip-set Zetex has ever developed. The verification of the chip-set is progressing well and I am pleased to report that this phase should be completed during the third quarter, said Rohrer. “We also expect to be able to sample the chip-set to selected customers in the fourth quarter. “

According to Rohrer several quality audio companies have already started developing products incorporating the technology and the company is moving into the second phase of marketing and design-in. A number of companies should be demonstrating products using the technology at the Consumer Electronics Show in Las Vegas in January 2008.

“The design-in process and therefore time to revenues is approximately 18 months, and we therefore expect to see significant financial returns from this technology in 2009 and beyond,” said Rohrer.

Zetex also made further progress in improving its portfolio of high brightness LED drivers. “The highlight was the introduction of a driver designed using in house process technology,” said Rohrer. ” This driver is the most complex device we have ever designed using our own processes and the first silicon was fully functional. The device was developed in close co-operation with a major customer and will ramp up production in the second half of 2008.”

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.